Budget 2026-27 as a bridge |
THE federal budget for 2026-27 won’t be just another annual ritual. It will likely be the penultimate budget before Pakistan’s Extended Fund Facility with the IMF concludes end-2027.
If the prime minister’s stated aim to exit the IMF programme decisively is to be realised, this budget must serve as the bridge between stabilisation and sustainable growth.
The government deserves credit for meeting the performance criteria and structural benchmarks agreed with the IMF. Macroeconomic stability has been restored, inflation moderated, the exchange rate steadied and fiscal discipline improved. The task now is to move from horizontal drift to upward ascent.
Some of the ongoing reforms such as the national tariff policy, separation of tax policy, deregulation of wheat and sugar trade, FBR digitisation, Discos’ privatisation and third-party access to oil and gas companies should be carried forward. It won’t be easy; the external environment is turning slippery.
For two decades, developing countries benefited from liberal trade regimes, lowered tariffs in advanced economies, concessional financing, generous multilateral flows, buoyant FDI, easier labour mobility and technology transfer. These are narrowing. Protectionism is resurging. Geopolitical fragmentation is reshaping supply chains. Aid and concessional flows are tightening. Labour visas are becoming restrictive.
Meanwhile, competitors aren’t standing still. India’s recent trade deals with EU and the US, Bangladesh’s preferential access for apparel exports using US cotton and imported inputs and Pakistan’s own renegotiation of the EU’s GSP-Plus in 2027 must be factored into budget strategy. One can’t assume past export advantages will persist. The 2026-27 budget must comply with IMF conditionalities while clearly articulating a post-2027 growth roadmap anchored in inclusive, sustained expansion, job creation and........