ISLAMABAD – Minister for Planning and Development Ahsan Iqbal on Monday announced that the government has set a GDP growth target of 4.2% for fiscal year 2025–26, as it unveiled a scaled-down development plan constrained by severe funding limitations.
Speaking to the media after the Annual Plan Coordination Committee (APCC) meeting in Islamabad, Iqbal revealed that over 118 projects—collectively worth Rs1 trillion—have been shelved due to the lack of fiscal space in next year’s Public Sector Development Programme (PSDP).
“This year’s development budget has been set at Rs1,000 billion. It is not possible to accommodate all ministerial demands,” Iqbal said. “We now have to make tough decisions in the national interest.”
The minister said the size of the economy is projected to grow to Rs129 trillion next year, with exports targeted at $35 billion. He added that Rs150 billion had been earmarked for the social sector and Rs70 billion for KP’s merged districts.
Iqbal stressed that only nationally significant projects would be prioritised, particularly those nearing completion or having foreign funding components. He further urged provincial governments to take greater ownership of local development, noting that “provinces have far more resources than the federation.”
Outlining the development roadmap under the ‘Uraan Pakistan’ initiative, the minister said priority projects for FY26 include the Diamer Bhasha Dam, Sukkur-Hyderabad Motorway, the N-25 highway in Balochistan, and the second phase of the Karakoram Highway.
He also highlighted enhanced allocations for special regions such as Azad Jammu and Kashmir, Gilgit-Baltistan, and the tribal districts, reaffirming the government’s intent to ensure balanced regional development.
Iqbal underlined the need for greater federal-provincial synergy to avoid project duplication and ensure the timely execution of national priorities. “Our development budget reflects tough but necessary choices, with a focus on impact and completion,” he added.
The annual plan, along with the federal budget, is expected to be tabled in parliament on June 10.
