ISLAMABAD:
The Federal Government has set key priorities for the 2026-27 Federal Budget, targeting a GDP growth target of 5.1% and keeping inflation below 6.5%, while emphasizing green development, climate action and better disaster management as central themes.
The Ministry of Finance has officially approved the budget calendar for the next financial year, with the interim macroeconomic framework to be prepared in the current month, according to an official circular.
The half-yearly assessment report will be presented to the National Assembly in February. All ministries have been directed to submit key budget forms, revised revenue and expenditure estimates and detailed plans of development projects by February 20.
According to the ministry, inflation should remain contained at 6.5% in the next budget. Particular emphasis will be placed on green taxes, non-tax revenues and climate-related subsidies.
Ministries were also instructed to identify environment and climate-related spending, while separate labeling of climate change-related income and spending became mandatory.
A strengthened disaster budget framework is also planned to mitigate the impact of natural disasters, with separate tracking of disaster-related spending. The government intends to divide natural resource categories and subsidies into climate action measures.
As a result, agricultural insurance and adaptation of climate-resilient infrastructure will fall under “climate adaptation,” while clean energy initiatives and electric vehicles will be included under “climate mitigation” grants.
The ministry stressed that non-tax revenues will be assessed based on environmental impact. Levies on polluting activities will be linked to climate targets, while energy, transport and pollution management will be prioritized under the green income programme.
The budget calendar has also been detailed. As such, meetings of the Budget Review Committee are scheduled from March 30 to April 12, while information on the exchange rate will be shared on April 15.
Approval of the fiscal strategy paper is expected by April 20, followed by the publication of budget ceilings for current and development spending between April 21 and 25. Annual Plan Coordination Committee meetings will take place in the first week of May.
This will be followed by a session of the National Economic Council during the second week of May. All budget documents are expected to be completed by the end of May, and quarterly estimates will be submitted by June 30.
