Defence

Pakistan increases its Defense Budget

Govt. rolls out $62.4B budget with 20% increase in defense spending

nasiraijaz June 11, 2025

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Increase in defense spending follows latest military standoff with longtime rival India

Aamir Latif

Karachi, Sindh, Pakistan

Pakistan on Tuesday rolled out a $62.4 billion budget for the fiscal year 2025-26, with a 20% increase in defense expenditure.

Finance Minister Muhammad Aurangzeb proposed the budget in the lower house, the National Assembly, in the capital Islamabad amid protest by opposition lawmakers.

The government has earmarked a sum of 2.55 trillion Pakistani rupees ($9 billion) for defense expenditure, compared to 2.1 trillion Pakistani rupees ($7.4 billion) in the previous budget.

The increase in defense spending follows a military standoff with longtime rival India last month.

The $62.4 billion budget, down 6.9% less than the previous year, has projected a fiscal deficit of 4.8% of the GDP, against a targeted 5.9% deficit in 2024-25.

The GDP growth is expected to stand at 4.2% in the next fiscal year.

The government has set an ambitious tax collection target of 14.02 trillion Pakistani rupees ($49.6 billion), compared to revised estimates of 12.33 trillion Pakistani rupees ($43.6 billion) for the outgoing fiscal year.

The markup payments were fixed at 8.2 trillion Pakistani rupees ($29 billion) in the next budget, compared to 9.7 trillion Pakistani rupees ($34.4 billion) in the last budget.

The pension bill of the federal government is fixed at 1.05 trillion Pakistani rupees ($3.7 billion), while subsidies and grants are 1.186 trillion Pakistani rupees ($4.1 billion), and 1.9 trillion Pakistani rupees ($6.7 billion), respectively.