ISLAMABAD:
The federal government has set key priorities for the 2026-27 federal budget, aiming for a GDP growth target of 5.1% and keeping inflation below 6.5%, while highlighting green development, climate action and improved disaster management as key themes.
The Ministry of Finance has formally approved the budgeting plan for the next financial year, with the provisional macroeconomic framework expected to be drawn up within the current month, according to an official circular.
The mid-year report will be presented at the national assembly in February. All ministries have been directed to submit key budget forms, revised revenue and expenditure estimates and detailed development project plans by February 20.
According to the ministry, inflation is expected to remain contained at 6.5% in the upcoming budget. Special emphasis will be placed on green taxes, non-tax revenues and climate-related subsidies.
Ministries have also been required to identify environment and climate-related expenditure, while separate labeling of climate change-related income and expenditure has become mandatory.
A strengthened disaster budgeting framework is also being planned to mitigate the impact of natural disasters with separate monitoring of disaster-related expenditure. The government intends to divide natural resource categories and subsidies into climate action.
Therefore, agricultural insurance and climate adaptation of infrastructure will fall under “climate adaptation”, while clean energy initiatives and electric vehicles will be included in “climate mitigation” grants.
The ministry has emphasized that non-tax revenues will be assessed based on environmental impact. Taxes on pollution-causing activities will be linked to climate targets, while energy, transport and pollution management will be prioritized under the green revenue agenda.
The budget calendar has also been outlined in detail. As such, meetings of the Budget Revision Committee are scheduled from March 30 to April 12, while information on the exchange rate will be shared on April 15.
Approval of the budget strategy paper is expected by 20 April, followed by the issuance of budget ceilings for current expenditure and development expenditure between 21 and 25 April. Meetings in the coordination committee for the Annual Plan will take place in the first week of May.
This will be followed by a meeting of the National Economic Council in the second week of May. All budget documents are expected to be completed by the end of May, with quarterly estimates submitted by June 30.
