Planning Minister Ahsan Iqbal announced that the government will prioritize strategic, high-value development projects in the upcoming fiscal year, as only Rs880 billion is available for the Public Sector Development Programme (PSDP) due to fiscal constraints. The total development budget is Rs1 trillion, but Rs120 billion is already earmarked for upgrading the N-25 Highway in Balochistan.
This budget reflects austerity measures aligned with IMF requirements under a $7 billion loan program. The IMF projects Pakistan’s economic growth at 3.6% and inflation at 7.7% in the next year. Iqbal stressed the need to balance spending with income and avoid wasteful allocations.
Infrastructure will receive the bulk of the funds (Rs664bn), particularly energy, water, and transport sectors. Special areas like Gilgit-Baltistan, AJK, and merged districts in KP will also get targeted allocations. Science, IT, and institutional reforms have been given smaller but notable shares.
Iqbal emphasized eliminating “token allocations” for underfunded projects and ensuring completion of those near completion (70–80%). He also outlined broader goals like raising the country’s exports to $35bn and remittances to $39bn, with hopes of reaching $50bn in future years. The government is also prioritizing connectivity initiatives and tertiary education, especially completing Higher Education Commission projects.
To optimize resources, 118 low-priority or redundant projects worth Rs1000bn have been identified for freezing or closure. Iqbal called for urgent tax reforms, noting Pakistan’s tax-to-GDP ratio is among the lowest globally and said increasing revenue is critical for future development.
