NEW DELHI: The Pakistan government has released a three-year economic plan that aims to increase the provinces’ share of the federal budget to 48.7% by 2027 from the current 39.4%. It also projects the country’s total debt to reach 79,731 billion Pakistani rupees by the end of the current fiscal year.
Domestic lending is expected to increase by around PKR 7,671 billion while foreign lending is expected to increase by PKR 818 billion.
At the same time, the company also revealed that it is working to reduce its debt burden through various measures, including refinancing and interest rate risk management.
Provinces covered under the new scheme will receive PKR 10.35 trillion by 2026-27 as awarded by the National Finance Commission (NFC), ARY News reported. This will mean an increase in provinces’ share, with an allocation of PKR 8.921 trillion in the upcoming fiscal year 2025-26 and PKR 10.35 trillion in 2026-27.
This fiscal year, 39.4% of the budget will be transferred to provinces under the NFC award. The government has also acknowledged the need to reassess how the NFC allocates resources to provinces. Pakistan’s total debt is expected to reach 79 trillion Pakistani rupees by June 2025, it has been reported.
The announcement comes after Pakistan and the International Monetary Fund (IMF) signed a three-year, $7 billion assistance package that is expected to help Pakistan’s “consolidate macroeconomic stability and create the conditions for stronger, inclusive and resilient growth,” according to an IMF statement.
However, a report last month revealed that the Pakistan government has borrowed more in the first 11 months of the current fiscal year than it did in the previous two fiscal years combined. This massive borrowing of PKR 7.39 trillion from July 2023 to June 7, 2024, exceeds the government’s total borrowing of PKR 7.16 trillion in the previous two fiscal years (FY23 and FY22).
Domestic lending is expected to increase by around PKR 7,671 billion while foreign lending is expected to increase by PKR 818 billion.
At the same time, the company also revealed that it is working to reduce its debt burden through various measures, including refinancing and interest rate risk management.
Provinces covered under the new scheme will receive PKR 10.35 trillion by 2026-27 as awarded by the National Finance Commission (NFC), ARY News reported. This will mean an increase in provinces’ share, with an allocation of PKR 8.921 trillion in the upcoming fiscal year 2025-26 and PKR 10.35 trillion in 2026-27.
Expanding
The announcement comes after Pakistan and the International Monetary Fund (IMF) signed a three-year, $7 billion assistance package that is expected to help Pakistan’s “consolidate macroeconomic stability and create the conditions for stronger, inclusive and resilient growth,” according to an IMF statement.
However, a report last month revealed that the Pakistan government has borrowed more in the first 11 months of the current fiscal year than it did in the previous two fiscal years combined. This massive borrowing of PKR 7.39 trillion from July 2023 to June 7, 2024, exceeds the government’s total borrowing of PKR 7.16 trillion in the previous two fiscal years (FY23 and FY22).
