Finance Minister Aurangzeb presents Budget 2026-27

Finance Minister Aurangzeb is presenting the Federal Budget for fiscal year 2026-27 while the opposition disrupts proceedings with loud chanting

Aurangzeb said, “Mr Speaker, it is a matter of great honor for me to present our government’s third budget for the fiscal year 2026-27 before this august House”.

“Pakistan and Saudi Arabia have reached a defence agreement, which marks a strategic partnership,” he said.

This budget is being presented at a time when Pakistan, in the eyes of its people and the world, has achieved the status of a country whose voice is heard and whose friendship is desired, he added.

Our defense industry has also become a source of earning valuable foreign exchange. This is proof that a strong defense is not only vital for our integrity but can also assist in the country’s economic development.

He said Pakistan has responded forcefully to India’s aggression. India was compelled to discuss peace. Our Operation Bunyanum Marsoos was a major success.

Pakistan has achieved a massive diplomatic success in recent months and successfully brought the United States and Iran to the negotiating table to resolve regional conflict, he added.

The American and Iranian presidents have repeatedly praised the particularly important role of Prime Minister Shehbaz Sharif and COAS and CDF Field Marshal Syed Asim Munir. This is an unprecedented success which has enhanced our respect and stature in the comity of nations, and our efforts have been appreciated at every level and forum, have been appreciated, he said.

Aurangzeb said Pakistan-China relations remained “an important pillar of the economy”.

Turning to the economy, he said Pakistan’s economic growth reached 3.7 per cent in FY2025-26 despite floods and regional conflict, while the size of the economy had reached $452 billion.

He said large-scale manufacturing productivity was recording its highest growth in four years, while per capita income had increased to $1,901.

The finance minister said foreign exchange reserves had risen from less than $4 billion three years ago to more than $17 billion, sufficient for approximately three months of imports.

Discussing inflation, Aurangzeb said it stood at 7 per cent and was expected to decline following the easing of Middle East tensions.

“Owing to Middle East tensions, inflation has increased, but with the resolution of the conflict, the inflation rate will come down,” he said.

He said the recent conflict involving Iran had pushed up international petrol and diesel prices, creating unexpected pressure on household budgets. However, he said the government had not passed on the full impact to consumers and instead provided a targeted petroleum subsidy of Rs128 billion during the recent oil crisis.

“Local prices of petrol and diesel did not fully reflect the intense severity of the international market,” he said.

Aurangzeb also said Pakistan had returned to the international bond market after four years, raising $750 million through Eurobonds.

He added that Pakistan had entered the Chinese capital market for the first time through a Panda Bond issue, where demand exceeded expectations.

The minister said 11 IPOs had been launched in the stock market during the year, while more than 250 companies had started business in Pakistan’s Special Technology Zones.

“Pakistan’s image has improved significantly and its voice is being heard internationally,” he said.

The finance minister said the government was delivering on its commitment to implement a long-delayed privatisation agenda, arguing that the private sector would be the main driver of Pakistan’s future economic growth.

Aurangzeb recalled a pledge made during last year’s budget address.

“During my budget speech in this very House last year, we made a promise to the nation that we would implement the privatisation agenda that has been delayed for decades,” he said.

The minister said the government had begun with the privatisation of First Women Bank and later completed the sale of Pakistan International Airlines (PIA).

“We started with the privatisation of First Women Bank, and then on December 23, 2025, the entire nation witnessed that through a transparent and live-televised auction in Islamabad, Pakistan International Airlines was handed over to the private sector for a total of Rs185 billion,” he said.

Aurangzeb described the transaction as a “successful and historic privatisation” carried out in line with PM Shehbaz’s vision that the private sector is the guarantor of sustainable economic growth.

“Private sector is going to lead this country,” he told the House.

The finance minister said the government’s privatisation programme would continue, announcing that power distribution companies (DISCOs), generation companies (GENCOs) and airports would also be privatised.

Highlighting economic reforms, Aurangzeb said the Federal Board of Revenue’s tax collection had increased from Rs7.2 trillion to Rs13 trillion over the past three years and was expected to reach Rs13 trillion by the end of the current fiscal year.

Among other economic indicators, he said the policy rate had fallen from 22 per cent to 11.5 per cent, while the State Bank’s foreign exchange reserves had exceeded $17 billion.

Aurangzeb said industrial growth stood at 6.1 per cent, while the services sector recorded growth of 4.1 per cent.

“The productive capacity of industries is continuously increasing,” he said, adding that “the world’s large companies are investing in Pakistan.”

Discussing governance reforms, Aurangzeb said the Faceless Customs Assessment System had removed direct interaction between importers and tax officials to ensure transparency and improve revenue collection.

He added that 39,000 new companies had been registered with the Securities and Exchange Commission of Pakistan (SECP), reflecting growing business activity.

On financial inclusion, the finance minister said the government had introduced five schemes aimed at providing financing to small borrowers and vulnerable segments of society.

He highlighted the Rs7.1 billion Agri-Storage Financing Facility, under which storage facilities would be established across the country, enabling farmers to safely store grains and agricultural produce while obtaining bank financing against the stored stock.

Aurangzeb said the initiative had been launched under the special focus of prime minister and was intended to accelerate financial inclusion while creating opportunities for skilled and marginalised groups.

He further said that under the Zar Khezi project, loans worth Rs300 billion were being provided to 750,000 farmers.

The minister also highlighted progress under the government’s Digital Pakistan agenda, saying large numbers of traders had started adopting digital systems.

“Significant progress has been made on the Digital Pakistan and financial inclusion agenda,” he said, adding that the reforms had resulted in an increase in banking users, rapid growth in digital transactions and a stronger foundation for a cashless economy.

According to Aurangzeb, the number of merchants integrated into the digital payments system rose to 1.67 million from 500,000 a year earlier.

He also told the House that a production monitoring system had been implemented in 27 cement factories and 75 sugar mills.

Turning to demographics and employment, the finance minister noted that 68 per cent of Pakistan’s population was below the age of 30 and stressed the need to create opportunities for young people.

“Financing for youth is the most important programme,” he said, emphasising that employment generation remained a key priority of the government’s economic strategy.

Aurangzeb said the government was focused on equipping young Pakistanis with the skills and opportunities needed to become active contributors to the economy.

“Our youth are filled with skill, determination and the spirit to achieve. It is the resolve of Prime Minister Muhammad Shehbaz Sharif that every young Pakistani receives the skills, training and opportunities needed to become an active stakeholder in the national economy,” he said.

The minister said that under the Prime Minister’s Youth Skills Development Programme, implemented through NAVTTC, around 515,000 young people had received modern and conventional technical training so far.

Citing an independent evaluation, he said 53 per cent of the trained participants had already secured employment.

Aurangzeb added that the programme placed special emphasis on the economic empowerment of women through IT-based training, enabling women to participate in the digital economy and freelancing sector from their homes.

This story is being updated.