NEC Greenlights National Development Budget for FY26

The National Economic Council (NEC) has given its unanimous assent to six key agenda items, most notably the national development budget for the upcoming fiscal year (FY26), which is valued at Rs4.224 trillion.

This endorsement occurred during an NEC gathering in Islamabad. The meeting was presided over by Prime Minister Shehbaz Sharif and attended by the chief ministers representing all four provinces: Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan.

During the session, it was revealed that the federal government would allocate Rs1 trillion, while the provinces would receive Rs2.87 trillion for their respective development initiatives.

The council also sanctioned the macroeconomic framework alongside targets established for the approaching fiscal year. A directive was issued, instructing relevant ministries, provincial bodies, and governmental institutions to collaborate with the Planning Ministry. The aim is to successfully meet the objectives outlined in the proposed annual plan for 2025-2026.

Development projects will concentrate on essential sectors such as healthcare, education, infrastructure, water resources, and housing.

The NEC also granted its approval for the 13th five-year development plan and the Uraan Pakistan Framework.

A third-party monitoring evaluation concerning the annual National Development Programme was presented. The assembly determined that future project blueprints should integrate the suggestions offered in the aforementioned report.

The NEC sanctioned a gross domestic product (GDP) growth rate of 2.7% for the current fiscal year and projected a growth rate of 4.2% for the subsequent financial year.

During the course of the session, updated metrics concerning the performance of the economy in the current fiscal year 2024-25 were shared.

Attendees were briefed on the annual national development expenditure, which totaled Rs3.483 trillion. This sum includes Rs1.100 trillion from the federal government and Rs2.383 trillion from the provinces.

Figures presented at the session indicated that remittances saw an increase of 30.9% between July 2024 and April 2025, leading to a positive current account balance for the first time.

The fiscal deficit for 2024-25 experienced a reduction, settling at 2.6% of GDP, while the primary balance, after rising, stood at 3% of GDP.

Government policies led to a gradual reduction in the policy rate, which now sits at 11%. Loans allocated for private sector advancement reached Rs681 billion between July 2024 and May 2025.

The GDP volume for 2024-25 is projected to be Rs114 trillion.