Pakistani Finance Minister Muhammad Aurangzeb on Tuesday, June 10, presented the federal budget for the financial year 2025-26, with a spurt in defence expenditures being a prominent feature.
The government has allocated PKR 2,550 billion (approximately USD 9 billion) for defence, marking a rise of more than 20% compared to the previous fiscal year. The announcement comes just a month after Islamabad called for de-escalation with New Delhi, following significant damage to military infrastructure during India’s Operation Sindoor.
Speaking to the National Assembly, Aurangzeb invoked the current geopolitical environment, adding, “This budget is being presented at a historic time when the nation showed unity and determination.” He recognized the adversity currently being encountered by the country and presented the budget as a reflection of national strength.
Fiscal year 2025-26 budget outlay amounts to PKR 17.573 trillion, or USD 62 billion, down 6.9% from last year. That includes expenditure on the government itself as well as net lending.
In the previous fiscal year, Pakistan had earmarked PKR 2.1 trillion (USD 7.45 billion) for defence, with around USD 2 billion allocated for equipment and related assets. Additionally, PKR 563 billion (USD 1.99 billion) had been set aside for military pensions an amount that is recorded separately from the formal defence budget.
The significant increase in defence spending signals Islamabad’s intent to reinforce its military preparedness amid continuing tensions with India, even as it attempts to navigate economic challenges and seeks financial stability through budgetary adjustments.