Budget FY27 sets the foundation to accelerate sustainable growth seen in past 2 years: Aurangzeb

Finance Minister Muhammad Aurangzeb on Saturday asserted that the proposed budget for the next fiscal year (FY27) would set the foundation for “accelerating the sustainable growth” recorded in the past two years.

His address follows the NA’s discussions earlier in the day on 140 recommendations made by the Senate on the budget.

The finance czar recalled that MNAs presented their opinions on the proposed budget during the debate, adding that reservations were also voiced in some proposals.

“But, we have gotten very clear feedback from within and outside the House that this is overall a positive and pro-growth budget, which sets the foundation to accelerate the sustainable growth witnessed over the last two years,” he declared.

Aurangzeb thanked the lawmakers for participating in the budget debate, specifically Opposition Leader Mehmood Khan Achakzai, as well as Saleem Mandviwala and Naveed Qamar, who head the standing committees on finance for Senate and NA, respectively.

The minister said both committees reviewed the budget recommendations with sincerity and gave their recommendations for improvement, “some of which are intended to be included in the Finance Bill 2026”.

He also thanked the leaders of the parties in the ruling coalition by name, describing their leadership as “very important in preparing the budget”.

Aurangzeb noted that a privilege motion had been moved by Khawaja Sheraz Mehmood and Azimuddin Zahid, which contended that the budget document had discrepancies.

He added that questions were raised on the GDP growth for FY26, the per capita income and their methodology.

“I want to clarify that no changes at all have been made to the methodology used for reporting the economic indicators,” the finance czar said.

He remarked that the economic indicators for FY18 would also be presented before the MNAs who raised the concerns, so that “it is apparent that there is consistency of measurement from administration to administration”.

The minister explained that the real GDP growth was calculated after adjusting for changes in economic activities and their impact on prices.

“This is why the 3.7pc GDP growth reported by PBS (Pakistan Bureau of Statistics) has been calculated on the constant prices of base year FY15-26,” he said, adding that it was an international standard from a methodology perspective.

The finance czar then elaborated that the nominal GDP, which is calculated on current market prices, differed from the real GDP in “both concept and measurement”.

“As per international practices, the per capita income is also determined based on current prices and is calculated on the gross national income (GNI) and estimated population,” he said, noting that the population estimates from 2023 and predictions were used.

Auranzgeb noted that GNI is a sum of the nominal GDP and net factor income received from abroad, and includes workers’ remittances.

He stated that the size of the economy (nominal GDP) rose from $408.2bn in FY25 to $452.1bn in FY26.

During his speech, the finance minister highlighted Pakistan’s role as mediator between the United States and Iran, which led to the peace memorandum signed this week.

Terming it a “golden chapter” of Pakistan’s diplomatic and political history, he praised the national leadership and congratulated the parliament.

“The first dividend of this peace agreement has already been announced by the prime minister in terms of the significant reduction in the petroleum prices,” he said, referring to the Rs74 reduction in petrol price and Rs67 cut in diesel rate.

More to follow ...