This is a contractionary budget, aimed at delivering a consolidated fiscal deficit of 3.9 percent of GDP—the lowest in sixteen years—and a primary surplus of 2.4 percent, the highest ever recorded. But while these targets are commendable on paper, the budget itself lacks coherence and vision. Token reductions in some tax rates — naively branded as reform—are offset by new or higher taxes to plug revenue gaps. The net effect is neutral, if not regressive.

The real problem is the absence of serious thinking. One area that held some promise was tariff reform—hailed by the finance minister as Pakistan’s “East Asian moment.” But upon closer inspection, the reform appears cosmetic. It gestures in the right direction but lacks depth.

An analysis at the HS 6-digit level, using data from the FBR and World Bank, offers a more granular view. Without getting lost in technicalities, it is clear that the focus is on reducing duties on final goods rather than intermediates — a policy choice that risks undermining the goal of boosting domestic production. For reforms to be meaningful, tariff cuts must target protected intermediates, not already-liberalized consumer imports.

Trade economists are divided. The architect of the National Tariff Policy sees this as one........

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