Pakistan’s social protection spending falls 7.5% to Rs144.9 billion

Pakistan’s social protection spending declined by 7.5 per cent in the first five months of FY26 despite higher budgetary commitments under the International Monetary Fund (IMF) programme, while the government projected moderate inflation and continued economic momentum, according to the Ministry of Finance.

In its January Economic Update and Outlook, the ministry said Rs144.9 billion was spent under the Benazir Income Support Programme (BISP) during July–November FY26, compared with Rs156.7 billion in the same period last year.

The decline comes despite commitments under the IMF programme to raise unconditional cash transfers, with the BISP Kafaalat benefit scheduled to increase from Rs13,500 to Rs14,500 as an end-January 2026 structural benchmark. Programme coverage is also required to expand by 200,000 households to reach 10.2 million families by the end of FY26.

The ministry said the economy remained positioned to sustain growth momentum during FY26, citing improved performance in large-scale manufacturing (LSM) and other high-frequency indicators. It attributed the outlook to easing inflationary pressures, ongoing structural reforms and improved monetary conditions.

Inflation is expected to remain within the 5–6 per cent range in January, the report said.

The update said macroeconomic stability persisted during the first half of the fiscal year, reflected in contained inflation, recovery in LSM output, higher foreign exchange reserves and a stable exchange rate. Fiscal discipline resulted in fiscal and primary surpluses, supporting the broader macroeconomic framework.