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Tuesday, July 23, 2024  
17 Muharram 1446  

Pakistan earmarks Rs2,122 billion for defence, here’s where it will go

The budget has been increased from Rs1,854 billion
Soldiers are pictured on a tank during the Pakistan Day military parade in Islamabad, Pakistan, March 23, 2022. Reuters
Soldiers are pictured on a tank during the Pakistan Day military parade in Islamabad, Pakistan, March 23, 2022. Reuters

Pakistan has earmarked Rs2,122 billion for defence in its annual budget for 2024-25, Finance Minister Muhammad Aurangzeb said on Tuesday.

He said this while presenting the budget in the National Assembly session on Wednesday.

The Rs2,122 billion allocation includes the following:

  • Rs815 billion in Employee Related Expenses
  • Rs513 billion in Operating expenses
  • Rs548 billion in physical assets
  • Rs244 billion in civil works

The allocation does not include an extra Rs6 billion for ‘defence administration’.

The budget is a significant increase from last year’s Rs1,854 billion.

The allocation of funds is almost related to the forecasts of the International Monetary Fund, with which South Asian countries seek an Extended Fund Facility to stabilise the economy.

This represents a more than 19% increase from the Rs1.804 trillion allocated for the outgoing fiscal year. The Fund made the forecasts in the second and final review documents of the Stand-By Arrangement.

Pakistan last month completed a nine-month $3 billion programme, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term programme.

The short-term programme, aimed at addressing domestic and external imbalances, has yielded positive results, including moderate economic growth, improved fiscal position, and increased foreign exchange reserves, according to the IMF.

The Fund had projected Pakistan’s defence allocation to be 1.72% of its gross domestic product (GDP) in FY25.

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