Prime Minister Shehbaz Sharif on Friday stated that Pakistan's economy has achieved stability despite numerous challenges. He expressed confidence that the federal government's third budget will set the economy on a faster growth trajectory.
Cabinet Meeting Approves Budget
Addressing a special meeting of the federal cabinet convened to approve the budget, the prime minister said the government had successfully navigated difficult economic circumstances and laid the foundation for sustainable development. He paid tribute to the nation for enduring economic hardships and inflation over the past two years, noting that the patience shown by Pakistan's 240 million people had played a vital role in the country's economic recovery.
The prime minister said the first two budgets of the current government were framed in line with national requirements and commitments under the International Monetary Fund (IMF) programme, which necessitated difficult fiscal measures, including additional taxation, to stabilize an economy facing prolonged uncertainty.
Inflation and Policy Rate Improvements
“We are fully aware of the difficulties faced by ordinary citizens. However, through consistent efforts over the last two years, inflation has come down from 38 per cent to single digits, while the policy rate has been reduced from 22.5 per cent to 11 per cent,” he said.
Sharif noted that regional and international developments, including tensions in the Gulf region, had created additional challenges, but Pakistan had remained on the path of economic stability. He said key economic indicators were improving and voiced optimism that the new budget would further strengthen growth and investment.
Future Prosperity and CPEC Cooperation
Expressing confidence in the country's future, he said the government's economic policies would ultimately lead to prosperity and improved living standards. Briefing the cabinet on his recent visit to China, Sharif said detailed discussions had been held on the implementation of the second phase of the China-Pakistan Economic Corridor (CPEC), with both sides agreeing to focus on four key areas of cooperation.
Budget Approval and Economic Survey Highlights
The federal cabinet on Friday approved the budgetary proposals for the next fiscal year 2026-27 in a special meeting chaired by Prime Minister Shehbaz Sharif. The cabinet reviewed the proposals before giving the go-ahead for their presentation to the National Assembly for consideration and debate. At the National Assembly, Finance Minister Muhammad Aurangzeb will unveil the annual federal budget.
The budget presentation follows the formal release of the Economic Survey on Thursday, which revealed a resilient economic performance despite global economic uncertainty, regional tensions, and the lingering impacts of devastating floods. According to the survey, Pakistan's economy rebounded with a robust 3.7% GDP growth, pushing the country's economic volume to a historic $452.1 billion (Rs 126.9 trillion). Additionally, per capita income witnessed a notable increase, rising to $1,901 from $1,751 in the previous fiscal year. The centre will transfer Rs8.8 trillion to four provinces under the NFC in FY 2026-27.
