export-led growth

The government secured parliamentary approval for the FY27 budget, which aligns with IMF requirements but lacks meaningful structural reforms. Finance Minister Muhammad Aurangzeb emphasized growth potential under stable energy prices, though the budget perpetuates reliance on consumption, remittances, and real estate, with minimal progress on tax system improvements or export-led growth strategies.

Finance Minister Muhammad Aurangzeb presented a budget with tax relief for high-earning individuals, concessional loans for farmers, and subsidies for fertilizers and farm equipment. However, the budget is criticized for lacking a coherent industrial policy to drive sustainable, export-led growth and for relying on real estate as a growth engine, a strategy with a history of structural weaknesses in Pakistan.

Finance Minister Muhammad Aurangzeb outlined key measures in the FY26-27 budget, including abolishing the super tax for businesses and exporters, introducing a Rs70 billion subsidy for refinancing schemes, and reducing tax slabs for the salaried class. The budget also proposes taxes on social media earnings, incentives for electric vehicles, and efforts to boost export-led growth, particularly in IT and construction sectors.