The Pakistani government has announced a significant increase in defense spending for the upcoming fiscal year, citing heightened security challenges across the country. Planning Minister Ahsan Iqbal confirmed the decision, emphasizing that national security remains the top priority despite economic constraints. The budget adjustment comes as Pakistan faces multiple security threats along its borders and internal stability concerns.
At the same time, the government has pledged to provide public relief measures in the new budget, attempting to balance IMF requirements with domestic economic pressures. This delicate balancing act follows the conclusion of the IMF mission’s latest review, which set a strict 1.6% GDP surplus target for 2025-26. The Fund’s conditions continue to shape Pakistan’s fiscal policies, requiring tough austerity measures even as security expenditures rise.
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Analysts note the competing demands on Pakistan’s limited resources strengthening defense capabilities while maintaining social spending and meeting IMF targets. The increased military allocation reflects ongoing counterterrorism needs and regional security dynamics, particularly along the western border. Meanwhile, the government faces public expectations for inflation relief and economic support ahead of challenging reforms.
This development highlights Pakistan’s dual economic-security dilemma, where fiscal stability and national defense priorities intersect. How effectively the government manages these competing demands while maintaining IMF program compliance will shape Pakistan’s economic trajectory in the coming year.
