Pakistan Budget Brief: 2025-26

Pakistan’s FY 2025-26 federal budget isn’t just a ledger of rupees and ratios, it’s a stress test of the government’s resolve to rein in deficits, shield vulnerable households, and squeeze climate action into every line item. In a year when debt service alone gulps more than a quarter of the pie, Islamabad is betting on a smaller fiscal gap, a heftier primary surplus, and the first-ever “green tag” on both spending and revenue. Before we dive into the detailed numbers, trends and trade-offs, here’s why this budget matters, and what it signals about the country’s economic playbook for the year ahead.