Why has Pakistan delayed its budget? The army link, explained

Pakistan has delayed the unveiling of its yearly budget.

According to reports, the development comes amid a tussle between the army and the government over resources. The budget, which was earlier expected around June 5, will now be presented on June 10.

But what do we know? Why has Pakistan delayed its budget? What about the army link?

Let’s take a closer look.

What do we know?

According to Arab News, Pakistan’s Deputy Prime Minister said the country will present its fiscal budget for the year 2026–2027 on June 10. The development came after senior government officials from the Pakistan Muslim League-Nawaz (PML-N) met senior leaders of the Pakistan Peoples Party (PPP) in a meeting held in Islamabad.

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Sindh Chief Minister Murad Ali Shah, senior PPP leaders Naveed Qamar, Sherry Rehman and Saleem Mandviwala, as well as federal ministers and senior economic officials, were present at the meeting.

Pakistan’s Geo TV quoted Finance Minister Muhammad Aurangzeb as saying the government’s discussions with coalition partners were ‘positive’. Aurangzeb added that another meeting was scheduled for later this week.

Aurangzeb added that the government needed to move forward in lockstep with the IMF, coalition partners and other stakeholders.

Pakistan's Deputy Prime Minister Ishaq Dar said the country will present its fiscal budget for the year 2026–2027 on June 10. Image: AP

The Office of the Deputy Prime Minister wrote on X that Dar and Finance Minister Muhammad Aurangzeb met senior PPP leaders “as part of routine pre-budget consultations” earlier in the day.

“It was unanimously agreed to recommend to Prime Minister Muhammad Shehbaz Sharif @CMShehbaz that the Budget for fiscal year 2026–2027 be announced on Wednesday, 10 June 2026,” the social media post read.

Why is the budget delayed?

Sources told News18 the delay comes amid a disagreement between the army and the government over defence, funding for provinces and targets set by the International Monetary Fund, which has provided a $7 billion (Rs 67,032 crore) bailout to help the country.

Sources said that Pakistan’s General Headquarters (GHQ) is looking for a minimum 20 to 25 per cent increase in defence spending. This has sparked issues with the federal and provincial governments as well as the IMF, coming as it does amid a widespread economic crisis.

Sources said the IMF wants Pakistan to have a budget that is more favourable to the public and not so heavily focused on defence. Pakistan’s finance ministry this week is learnt to have sought the IMF’s permission to make changes to major expenditures.

Moneycontrol reported that the Shehbaz regime is exploring ways to generate approximately ($53 billion) Rs 5.1 lakh crore in additional fiscal space from provincial governments to meet fresh spending requirements and fund military operations.

The IMF wants Pakistan to prioritise public welfare and maintain fiscal discipline under its $7 billion (Rs 67,032 crore) bailout programme, limiting excessive defence expenditure.

The finance ministry is reportedly considering further reductions in provincial allocations. Sources said the federal government may need to introduce legislation before the Finance Bill for 2026–27 if it seeks additional contributions from the provinces.

The National Economic Council (NEC) meeting has also been postponed because of unresolved disagreements over the Public Sector Development Programme, the Benazir Income Support Programme and power subsidies, the outlet reported, citing sources.

Officials are reportedly revising development and welfare spending plans as the government attempts to accommodate military demands while remaining within IMF-prescribed fiscal limits.

A government source, speaking on condition of anonymity, told Reuters that the June 5 parliamentary session would proceed as scheduled, providing a platform for both the government and the opposition to debate the budget.

The source said there were still issues to be settled with the IMF on creating fiscal space, especially some funds to be relinquished by the provinces for federal spending.

An editorial in the newspaper Dawn has warned about the steps the Sharif government is considering taking.

“Mistaking IMF compliance for sound economic management is what is driving the economy into deeper stagnation. The growth model is broken,” it said.

“The prime minister took note of our proposals and some immediate decisions were made, while others will be reflected in the budget,” Muhammad Hanif of the Karachi Chamber of Commerce was quoted as saying.

According to Al Jazeera, Pakistan is losing 6 per cent of its GDP to corruption. Meanwhile, defence spending comprises around 15 per cent of the country’s national budget.

FAQs

1. Why did Pakistan delay its budget presentation?

The delay is mainly due to disagreements between the government, the military and the IMF over defence spending, provincial funding and fiscal targets.

2. What role does the army play in the delay?

Pakistan’s military is reportedly pushing for a 20–25 per cent increase in defence spending, which has created tensions with the government and the IMF.

3. How is the IMF influencing Pakistan’s budget?

The IMF wants Pakistan to prioritise public welfare and maintain fiscal discipline under its $7 billion (Rs 67,032 crore) bailout programme, limiting excessive defence expenditure.

With inputs from agencies