I will only say this once, “we continue to remain in the free-fall, the budget 2025-26 deepens the crisis and misses critical reform opportunity”

As Pakistan unveils its federal budget for fiscal year 2025-26 today, the numbers paint a stark picture: an economy in free fall, clinging to austerity and foreign diktats instead of reform and recovery. Finance Minister Muhammad Aurangzeb will present a budget worth Rs17.68 trillion, nearly Rs900 billion less than the previous fiscal year. While officials frame this reduction as “fiscal discipline,” analysts see it as a symptom of a shrinking state capacity, overwhelmed by debt and lacking the political will for structural reform.

At the heart of this budget lies a staggering Rs8.685 trillion allocated to interest payments, consuming nearly half of the total outlay. Of this, Rs7.5 trillion is for domestic debt servicing, and Rs1.1 trillion for foreign loans. With a projected fiscal deficit of Rs6.63 trillion, the federal government is desperately banking on a Rs1.22 trillion surplus from provinces to help close the gap-an expectation that’s been historically unreliable.

‘Without structural reforms, Pakistan risks becoming a country that never escapes crisis-only manages it.’

Meanwhile, the country’s Public Sector Development Programme (PSDP) has been limited to just Rs1 trillion ($3.5 billion). The lion’s share-Rs664 billion-will be spent on infrastructure projects including........

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