Government, PPP agrees to recommend June 10 for FY2026-27 budget session

The government and its coalition partner Pakistan Peoples Party (PPP) on Wednesday agreed to recommend to Prime Minister Shehbaz Sharif that the federal budget for the financial year 2026-27 be presented on June 10.

According to a statement issued by the Deputy Prime Minister’s office, Foreign Minister Ishaq Dar and Finance Minister Muhammad Aurangzeb held a meeting with senior PPP leaders to discuss pre-budget consultations ahead of the federal budget.

The statement said the discussions focused on current expenditure and development spending priorities, including the Public Sector Development Program (PSDP), as well as broader economic priorities such as fiscal sustainability, public welfare measures, development initiatives and inclusive growth for the financial year 2026-27.

“It was unanimously agreed to recommend to Prime Minister Muhammad Shehbaz Sharif that the budget for the financial year 2026-2027 be announced on Wednesday, June 10, 2026,” the statement said.

The meeting was attended by Sindh Chief Minister Syed Murad Ali Shah, MNA Syed Naveed Qamar, Senator Sherry Rehman, Senator Saleem Mandviwala, Sindh Irrigation Minister Jam Khan Shoro, Minister of State for Finance and Railways Bilal Azhar Kayani, Special Assistant to Prime Minister Federal Secretary of Finance Tariq Bajullah, Imdad Federal Secretary of Finance Board. Chairman Rashid Mahmood Langrial and other senior officials from the relevant ministries and departments.

The government had previously planned to present the federal budget on June 5, but delayed the announcement after failing to resolve issues related to spending allocations and address concerns raised by coalition partners.

According to government sources, the budget announcement has now been pushed to next week as the government seeks to resolve outstanding issues with the International Monetary Fund (IMF) and the PPP, whose support remains crucial to the government.

Sources said the federal government was seeking additional fiscal space of Rs1.7 trillion from the provinces, mainly Punjab and Sindh, for the next fiscal year through adjustments in the National Finance Commission award and by transferring some spending responsibilities.

The government has also postponed a scheduled meeting of the National Economic Council (NEC) amid unresolved issues regarding PSDP allocations, power sector subsidies and the treatment of social security expenditure under the Benazir Income Support Program (BISP).

The NEC meeting, initially scheduled for Wednesday, was expected to approve the national development budget for the Center and the four provinces along with macroeconomic targets for the next financial year. The meeting, to be chaired by Chief Minister Shehbaz and attended by the provincial chief ministers, is now likely to be held on Thursday or Friday.

Among the unresolved issues are the size of the development budget for the next fiscal year and the inclusion of development schemes proposed by coalition partners.

The PPP and the government have held regular consultations to address these issues, including resource allocation and expenditure sharing.

Sources said the federal government also wanted the provinces to shoulder at least half of the BISP’s expenditure burden, but the provincial governments were unwilling to shoulder the additional responsibility.

Another unresolved issue concerns the composition of the federal divisible pool to be shared between the Center and the provinces.

According to government sources, the finance ministry this week sought the IMF’s consent to make adjustments to major expenditure items, days before the budget’s tentative presentation date of June 5.

The sources said the IMF was not particularly receptive to the government’s proposal, but asked it to share the proposed spending adjustments along with the rationale behind them.