Pakistan's Budget 2026-27 Prioritizes Defense Spending

Pakistan's federal budget for the fiscal year 2026-27, recently passed by parliament, allocates approximately 67 billion USD, with a notable increase in defense spending to 18.3 trillion Pakistani Rupees (about 10.8 billion USD). This budget reflects a consistent upward trend in military expenditure over the past five years, prioritizing military needs over public welfare.

In stark contrast, allocations for higher education and healthcare are significantly lower, at roughly 46 billion Rupees (165 million USD) and 25 billion Rupees (89 million USD), respectively. The budget's focus on military spending comes amid rising poverty levels, with the poverty headcount ratio increasing from 21.9% in FY 2018-19 to 28.9% in FY 2024-25, affecting approximately 70 million people.

Balochistan, the poorest province, has a poverty rate of 47%. The budget also allocates a large portion to debt servicing, limiting fiscal space for social expenditures, which are crucial for long-term economic growth.