Pakistan's Finance Minister Muhammad Aurangzeb presented the federal budget for fiscal year 2026–27 on Friday, setting a 4% GDP growth target and 8.2% average inflation while keeping three IMF-mandated benchmarks intact: a tax revenue target of Rs15.26 trillion, a primary surplus of 2% of GDP, and a fiscal deficit capped at 3.6%. The Rs18.8 trillion budget includes a 17.7% increase in defence spending to Rs3 trillion, a 7% raise in government salaries and pensions, income tax reductions across several brackets, and the abolition of the super tax on businesses earning between Rs150 million and Rs500 million. To create fiscal space, the government froze provincial transfers from the federal divisible pool at Rs13.35 trillion for three years — a move critics say shifts the burden of consolidation onto the provinces rather than reducing central expenditure.