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On 11 June 2025, the Government of Pakistan revealed its upcoming budget for the fiscal year of 2025 to 2026, under which it proposed a near 20% increase to the country’s defence budget.
This increase will raise the defence budget to 2.55 trillion Pakistani rupees (PKR) – or USD $9 billion – from PKR 2.12 trillion in the fiscal year of 2024-2025 (or USD $7.64 billion).
The federal government’s budget for 2025-2026 decreased by 6.7% compared to 2024-2025 (around USD $62.45 billion), resulting in defence assuming a greater share of this year’s budget compared to that of the previous year.
In terms of spending priorities, $2.99 billion will go into employee-related expenses (e.g., wages); $2.48 billion will be spent on operating expenses (e.g., fuel, training, etc.); $2.34 billion into new procurement, and $1.19 billion into civil works (e.g., infrastructure maintenance).
It is unclear how much each of the tri-services will receive from this budget. In 2024-2025, the Army received about 47.5% of the budget, while the Pakistan Air Force (PAF) and Pakistan Navy (PN) got about 21.3% and 10.8%, respectively. The remainder from last year went into an area designated as “inter-services organizations,”
It should be noted that the stated defence budget does not include pensions, which are allocated in a separate pool set at PKR 742 billion, or $2.6 billion.
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However, the decreases in defence or defence-adjacent spending in the PSDP is marginal when seen in real values. The SPD’s budget in the PSDP declined by $65.93 million, while the defence production spending was reduced by $7 million. The biggest real decline was in SUPARCO’s budget, which saw a drop from $231.59 million in 2024-2025 to $19.12 million in 2025-2026.
Examining the PSDP budget helps determine whether the defence budget was increased in actual real terms or if defence-related funding from other areas were merged into the formal defence budget. The defence-related spending in the PSDP has certainly decreased, but the decline does not entirely match or correspond to the increase being seen in the defence budget.
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