Key Points
- Spending supports recovery amid improving growth and easing macroeconomic pressures.
- National Economic Council approves Rs 3.66 trillion development budget for next fiscal year
- Government sets 4 per cent GDP growth target for FY2026–27
ISLAMABAD: Pakistan’s development spending reached Rs 3.48 trillion during fiscal year 2025–26, according to the Economic Survey released on Thursday, reflecting continued public investment in infrastructure, energy and social sectors in a phase of economic stabilisation and recovery.
According to the Survey, development expenditure remained focused on ongoing projects as fiscal consolidation efforts and macroeconomic adjustments shaped spending priorities during the year.
Infrastructure and connectivity lead spending
A major share of development resources was directed toward infrastructure projects, including transport networks, road connectivity and related logistics systems aimed at improving productivity and easing trade flows.
The infrastructure investment remained central to public sector development strategy, given its role in supporting long-term economic efficiency, said Finance Minister Muhammad Aurangzeb while launching the Economic Survey 2025-26.
Energy and water projects top priority
Energy sector projects continued to absorb a significant portion of development spending, alongside initiatives in water resource management.
Authorities said these investments are critical to addressing structural bottlenecks that affect industrial output, agriculture and urban development.
Social sector investment
Public spending also supported education, health and social protection programmes, reflecting the government’s focus on human capital development.
Officials said these allocations were intended to improve long-term productivity and support inclusive growth.
Spending pattern reflects fiscal constraints
The Economic Survey noted that development spending was shaped by fiscal consolidation priorities, with emphasis on completing ongoing schemes rather than launching a large number of new projects.
Authorities said this approach was aimed at ensuring efficient use of limited fiscal space while maintaining momentum in key sectors.
New development plan of Rs 3.66 trillion
In parallel, the National Economic Council has approved a Rs 3.66 trillion national development budget for the next fiscal year, along with a 4% GDP growth target for FY2026–27.
Planning Minister Ahsan Iqbal said the new plan prioritises infrastructure expansion, energy security, water management, education and export-oriented growth.
Officials said the upcoming development framework is designed to build on recent macroeconomic stability and strengthen medium-term growth prospects.
Outlook
The Economic Survey said Pakistan’s development spending during FY2025–26 supported gradual economic recovery, with improved growth indicators and easing inflationary pressures.
However, policymakers stressed that sustained growth will depend on improved project execution, higher investment efficiency and continued fiscal discipline in the years ahead.
