Pakistan Sets 4% Growth Target With Rs3.669trn Development Plan

Pakistan’s National Economic Council has approved a Rs3.669 trillion national development programme for fiscal year 2026-27, setting a 4% GDP growth target as the government moves into a difficult budget cycle. The meeting in Islamabad was chaired by Prime Minister Shehbaz Sharif and brought together federal and provincial leadership to finalise major economic planning priorities.

The approved development envelope includes Rs838 billion in foreign assistance and is divided across federal, provincial and state-linked projects. The federal Public Sector Development Programme has been set at Rs1 trillion, while provincial development plans will receive Rs2.218 trillion and state-owned enterprises will be allocated Rs451 billion.

The council also reviewed and approved revised indicators for the outgoing fiscal year 2025-26. For that year, the federal PSDP was placed at Rs820 billion, provincial development programmes at Rs2.938 trillion and state-owned enterprises at Rs355 billion, while the revised GDP growth target was set at 3.7%.

Officials said the NEC unanimously endorsed a four-point agenda and directed ministries, provincial governments and public institutions to coordinate closely with the Ministry of Planning. The aim is to turn the Annual Plan 2026-27 into measurable progress rather than leaving the approved spending framework as a paper exercise.

Prime Minister Shehbaz Sharif thanked the participants for backing the agenda and said national consensus strengthens the federation. He argued that federal and provincial governments had acted as one team while preparing the budget framework and stressed that cooperation would be essential for economic recovery.

The meeting also reviewed the performance of key project-approval forums. Between April 2025 and March 2026, the Central Development Working Party approved 116 projects worth Rs316 billion, while the Executive Committee of the National Economic Council cleared 72 projects valued at Rs5.117 trillion.

A new monitoring and review policy was also placed before the council, including a pilot project to assess development initiatives through artificial intelligence. Under the Uraan Pakistan framework, the NEC approved 11 national economic development missions and asked the Planning Ministry to prepare implementation roadmaps with relevant ministries and provinces.

The allocations show the government’s stated priorities for the next fiscal year. Funds have been earmarked for infrastructure, energy, water resources, the social sector, governance, education, health, information technology, transport and communications, as well as Azad Jammu and Kashmir, Gilgit-Baltistan and the merged districts of Khyber Pakhtunkhwa.

The decision matters because Pakistan is trying to balance development spending with fiscal discipline, IMF commitments, rising security needs and pressure from global oil prices. The prime minister also referred to fuel relief measures and said mobilising additional resources would remain a priority as the government seeks to protect consumers while meeting reform obligations.

The next test will be implementation. Pakistan has often approved ambitious development plans, but delays, cost overruns and weak monitoring have reduced their impact. If the government wants the 4% growth target to appear credible, it will need faster project execution, stronger provincial coordination and transparent use of the approved development funds.