The National Economic Council (NEC) on Wednesday approved a Rs. 3,795 billion development budget for the upcoming fiscal year in a meeting chaired by Prime Minister Shahbaz Sharif and attended by chief ministers of all four provinces.
Of the national development budget, Rs. 1,000 billion has been allocated for federal government projects, Rs. 1,188 billion for Punjab, Rs. 887 billion for Sindh, Rs. 440 billion for Khyber-Pakhtunkhwa, and Rs. 280 billion for Balochistan. The NEC also greenlit Rs. 288 billion for state-owned enterprises (SOEs)’ investment in projects under Public-Private Partnerships with an aim to boost economic activity across various sectors.
The meeting set economic growth for FY2025-26 at 4.2%, with sector-specific growth goals of 4.5% for agriculture, 4.3% for industry, and 4% for the services sector. In external trade, the government is targeting $35 billion in exports against $65 billion of imports. The overseas remittances target has been set at $39 billion for the upcoming fiscal year.
The meeting also unanimously approved the NEC’s six-point agenda and directed relevant ministries, provinces, and government institutions to work closely with the Ministry of Planning to achieve the targets set in the proposed annual plan. Priority sectors for development include health, education, infrastructure, the water sector, and housing, according to a statement issued by the Prime Minister’s Office.
The NEC further approved the 13th Five-Year Plan (2024–2029) in alignment with the Uraan Pakistan Framework.
According to the statement, the meeting was briefed on a third-party monitoring report on the annual national development program, deciding to cater all future project planning in accordance with its recommendations.
Further, the meeting reviewed the performance report of the revised indicators of the economy for the outgoing fiscal year. It was informed that Rs. 3.483 trillion was spent on the Annual National Development Program, including Rs. 1.1 trillion for the federal government and Rs. 2.383 trillion for the provinces. The meeting approved GDP growth of 2.7% for FY25 and a target of 4.2% for the next fiscal year. It was informed remittances increased by 30.9% from July 2024 to April 2025, and the current account balance posted a surplus.
The fiscal deficit for FY25 was reduced to 2.6% of GDP, while the primary balance showed a surplus of 3% of GDP.
The meeting said the policy rate had gradually declined to 11% while loans issued to the private sector from July 2024 to May 2025 rose to Rs. 681 billion. The GDP for FY25 is projected at Rs. 114 trillion or $411 billion, the meeting was informed.
A report on the progress of the Central Development Working Party for April 2024 to March 2025 was also presented to the NEC with details of national development projects approved by it and the Executive Committee of the NEC.
The prime minister thanked all participants for the consensus on the agenda items and said that such national consensus was the key to Pakistan’s bright future.
Indian aggression
During the meeting, the prime minister congratulated the participants on Pakistan’s historic victory in Operation Marka-e-Haq on May 10. “By the grace of Allah Almighty, Pakistan achieved victory in Marka-e-Haq due to the professional competence and bravery of the Pakistan Armed Forces,” he said.
He described India’s recent narrative against Pakistan as extremely irresponsible, posing serious threats to regional peace and security, adding the people of Pakistan stood united in safeguarding national integrity against India. “India’s threats to deprive Pakistan of its water resources are unacceptable,” he said, stressing they would also defeat India in the struggle to protect the water resources.
The prime minister said a special meeting would be held with all chief ministers to formulate a robust strategy for the protection of Pakistan’s water resources in light of Indian aggression. “The federation and provinces would work together to successfully safeguard Pakistan’s water resources,” he said.
The premier noted that the recent economic stability was made possible due to the joint efforts of the federal and provincial governments. “The country is now on the path to economic growth,” he said, pointing to agriculture as playing a key role in increasing national reserves and economic growth.
“A strategy was being formulated for a gradual increase in agricultural production,” he added.