Pakistan Defence Budget 2026-27 Swells to Rs.3.01 Trillion

ISLAMABAD: The federal government has proposed a defence budget of Rs3.01 trillion for the fiscal year 2026-27. This allocation represents a 17.65 percent increase over the previous year’s original budget of Rs2.55 trillion. According to data analyzed by Focus Pakistan, the strategic move underscores the state’s commitment to military preparedness amid a volatile regional security environment and evolving cross-border challenges.

Defense allocations account for close to 16% of the overall federal budget of Rs. 18.77 trillion. In relation to the forecasted nominal GDP of Rs. 143.6 trillion, defense expenditures amount to around 2.08%. The present move signals a reversal back to the 2% of GDP mark, which has always been somewhat out of reach recently because of tight budgetary conditions.

Pakistan’s Finance Minister Muhammad Aurangzeb, while laying down the budgetary projections, reiterated that the country’s national security is its first priority. The government plans to reconcile this with its budget deficit targets which stand at 3.6% for the total fiscal deficit, whereas for the primary surplus, it stands at 2%.

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The functional allocation clearly depicts a more strategic approach towards modernization and procurement. These include:

• Physical Assets: There is a major uplift in this aspect as Rs925.83 billion is allocated here. The 39.62 percent increase from last year suggests a great effort towards improving the equipment and ammunitions.
• Cost Incurred for Salaries and Allowances of Employees: Rs967.55 billion has been assigned for salaries and allowances for both military and civilian employees. The cost is increased by 14.36 percent.
• Operating Cost: Rs743.46 billion is allocated for fuel, rationing, training, medication, and many other expenses.
• Civil Works: Maintenance of military infrastructure and the construction of new facilities received Rs363.16 billion.

Pakistan Defence Budget: Five-Year Trend (FY2022–2027)

Strategic Sector and Internal Security

Besides the basic services of defense, the government is still making investments in strategic assets, as allocations for PAEC have reached up to Rs40.66 billion and for SUPARCO up to Rs11.57 billion.

Internal security also remains a critical focus. The budget for Public Order and Safety Affairs has risen to Rs389.5 billion, with police and civil armed forces receiving Rs350.4 billion to support ongoing counter-terrorism operations. Furthermore, military pensions budgeted separately under the federal pension head—stand at Rs822 billion, a 10.8 percent increase.

Regional Perspectives

In a regional context, experts note that while Pakistan’s allocation of 2.08 percent of GDP remains broadly comparable to India's defence spending as a percentage of its economy, the absolute financial outlays differ significantly due to the scale of the respective economies. Analysts view this budget as a necessary response to persistent conventional deterrence requirements on the eastern border and intense counter-terrorism commitments along the western front.

Despite the pressure to divert more funds toward development projects, the government maintains that the current security climate necessitates this sustained growth in defence spending to ensure long-term stability.