Pakistan Budget Deadlock: Key Economic Council Meet Postponed For Third Time | Exclusive

Last Updated:June 08, 2026, 15:26 IST

Pakistan’s annual budget has hit a roadblock after the National Economic Council meeting was postponed for the third time amid a lack of consensus over key economic targets.

Pakistan’s annual budget process has hit a major roadblock, with the National Economic Council meeting postponed for the third time amid a lack of consensus between the federal government and the provinces, top intelligence sources told CNN-News18.

The scheduled NEC meeting, which was to be chaired by Pakistan Prime Minister Shehbaz Sharif and attended by the chief ministers of all four provinces, was expected to approve new development budgets and economic targets. However, the meeting has now been deferred again as differences over spending priorities, revenue sharing and budget cuts remain unresolved.

Top intelligence sources said the deadlock has deepened because the Pakistan government is caught between pressure from the International Monetary Fund and competing demands from the federation and the provinces.

On one side, the IMF is pressing Islamabad to tighten spending, expand the tax base and meet aggressive fiscal consolidation targets. On the other, the federal government is facing heavy defence-related demands, while provinces are resisting proposed cuts in their share.

According to sources, the dispute has now reached a stage where Pakistan’s finance ministry is struggling to finalise the annual budget. The core areas of disagreement include the National Finance Commission award, revenue sharing arrangements, proposed provincial share cuts and overall spending limits.

The IMF, which is handling Pakistan’s multi-billion-dollar bailout programme, has issued strict warnings against loose spending. Sources said the IMF has set a target for federal revenue to rise by over 13 per cent to PKR 17.14 trillion.

However, the proposed cuts in provincial shares have emerged as a major sticking point. The provinces are not on board with the reductions, while the federal government is under pressure to meet IMF conditions and accommodate rising defence expenditure.

The repeated postponement of the NEC meeting reflects the scale of the budget impasse. The council is a key constitutional forum where Pakistan’s federal and provincial leadership approve development spending and economic priorities. Without consensus at the NEC level, finalising the budget becomes difficult.

The budget deadlock comes at a time when Pakistan’s economy remains under severe stress and continues to depend heavily on IMF support. The latest delay shows that the challenge is not only economic but also political, with Islamabad struggling to align its external commitments with internal power-sharing arrangements.

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Manoj Gupta

Group Editor, Investigations & Security Affairs, Network18

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