Pakistan raises defence budget above Rs3 trillion for FY2026-27

The federal government has allocated more than Rs3 trillion for defence in the budget for fiscal year 2026-27, up from Rs2.56 trillion in the previous year, amid heightened regional security concerns.

Defence expenditure is projected at 2.1% of gross domestic product in FY27, compared with the revised estimate of 2.03% for the outgoing fiscal year.

Presenting the budget, Finance Minister Muhammad Aurangzeb linked the higher allocation to military preparedness and changes in the regional security environment. He said Pakistan’s military response to India in May 2025 had increased international interest in the country’s defence capabilities and locally produced fighter aircraft.

Aurangzeb said defence exports could generate foreign exchange and contribute to economic activity, alongside meeting national security requirements.

He also referred to the defence agreement signed between Pakistan and Saudi Arabia last year, saying it had expanded bilateral strategic cooperation.

The minister credited Prime Minister Shehbaz Sharif and Chief of Defence Forces and Chief of Army Staff Field Marshal Asim Munir with strengthening defence ties between the two countries.

Aurangzeb said Pakistan was working to support a long-term agreement between the United States and Iran and restore the movement of oil through the Strait of Hormuz.

He added that China supported Pakistan’s diplomatic efforts and remained the country’s most important trading partner.