Pakistan hikes defence spending by 20% in budget amid tensions with India

ISLAMABAD: Pakistan on Tuesday increased its defence budget by 20%, allocating Rs 2,550 billion ($9 billion) for the fiscal year 2025-26, amid tensions with India. Finance minister Muhammad Aurangzeb presented the Rs 17,573 billion worth federal budget for the fiscal year 2025-26 in the National Assembly.

He also presented the budget document as a finance bill in the National Assembly.Last year, the govt allocated Rs 2,122 billion for defence, reflecting a 14.9% increase over Rs 1,804 billion budgeted for the fiscal year 2023-24. The defence sector expenses are the second-biggest component of the annual expenditure after the debt payments. The govt allocated Rs 8,207 billion for debt servicing, which constitutes the single biggest expense. The increase in the defence expenditure is expected to get the broad support of the lawmakers during the budget debate and voting on the finance bill.Aurangzeb also announced a 4.2% GDP growth target for the economy which is higher than the 2.7% achieved in the current year ending on June 30. He said that debt and interest servicing would cost Rs 8,207 billion.