National development outlay may exceed ₨4 trillion in FY2026-27

The Annual Plan Coordination Committee (APCC) is set to meet on Monday to finalise recommendations for the National Economic Council (NEC), including a 4% economic growth target, 8.2% inflation target and a national development outlay exceeding ₨4 trillion for FY2026-27, according to a news report. 

The NEC, scheduled to meet on June 3 under the chairmanship of Prime Minister Shehbaz Sharif, will consider the macroeconomic framework and development programme for the next fiscal year.

According to the working paper, the federal Public Sector Development Programme (PSDP) has been proposed at ₨1.126 trillion, while provincial Annual Development Programmes (ADPs) are expected to total around ₨3 trillion, taking the overall national development outlay to between ₨4 trillion and ₨4.5 trillion.

The APCC document notes that the ongoing Middle East conflict has emerged as a major external risk for both the global economy and emerging markets. Before the conflict, the International Monetary Fund (IMF) had projected global growth of 3.3% for 2026 and 3.2% for 2027. These forecasts were later revised to 3.1% and 3.2%, respectively.

Following the outbreak of the conflict in late February 2026, global oil prices rose from around $72 per barrel to nearly $120 per barrel. In Pakistan, average inflation during July-April FY2025-26 increased to 6.2%, compared with 4.7% in the corresponding period last year, while inflation accelerated to 10.9% year-on-year in April 2026 from 0.3% a year earlier.

Pakistan's economy is estimated to have grown by 3.7% in FY2025-26, compared with 3.2% in the previous year. Large-scale manufacturing (LSM) is projected to post growth of 6.1%, reversing a contraction of 0.7% recorded in FY2024-25.

For FY2026-27, the government is targeting 4% GDP growth. Agriculture is projected to grow by 3.8%, supported by 3.6% growth in major crops, 2.5% growth in cotton ginning and 3.9% growth in livestock. LSM is expected to expand by 4.5%, while the overall industrial sector is targeted to grow by 4%.

The services sector is projected to grow by 4.2%, led by wholesale and retail trade at 4.2%, transport, storage and communications at 3.7%, financial services at 4.5%, and information and communication at 7.7%.

The framework envisages national savings rising to 14.3% of GDP and investment reaching 15% of GDP. Public investment is projected at 3% of GDP, while private investment is targeted at 10.3% of GDP. Inflation is forecast at 8.2% for the next fiscal year.

The government is also targeting the creation of 2 million jobs during FY2026-27 through higher investment and economic growth. Of these, 1.1 million jobs are expected to be generated in the services sector, 0.5 million in industry and 0.4 million in agriculture.