Federal Budget 2026-27 Aims to Strengthen Economic Stability
KARACHI: President of the United Business Group (UBG) and former President of FPCCI, Zubair Tufail, has described the Federal Budget 2026-27 as a positive step toward achieving economic stability in Pakistan. While appreciating several reform measures introduced by the government, he emphasized the need for stronger policies to accelerate exports, attract investment, and support industrial growth.
Speaking on the newly announced budget, Zubair Tufail said economic stability remains essential for restoring business confidence and creating a sustainable environment for long-term growth. He noted that the government has taken important steps to improve fiscal discipline and maintain macroeconomic balance.
Economic Stability Reflected in Key Economic Indicators
According to Zubair Tufail, several economic indicators show encouraging signs of economic stability. He pointed out that Pakistan’s GDP growth rate has improved to 3.7 percent, while the fiscal deficit has been reduced to 0.7 percent of GDP. He also highlighted that the primary surplus has reached 3.7 percent of GDP.
He further noted that the cost of servicing public debt has declined significantly, easing pressure on government finances. The expected increase in foreign exchange reserves to $18 billion by the end of the fiscal year and the rise in per capita income to $1,901 also reflect improving economic conditions.
Housing and Development Initiatives Welcomed
Zubair Tufail welcomed the government’s allocation of Rs71 billion for the Apna Ghar Housing Scheme and the construction sector. He said the initiative would stimulate activity in housing and related industries, generating employment opportunities and supporting economic growth.
He also appreciated the allocation of Rs88 billion for export refinancing and increased funding for development projects and higher education. According to him, these measures can contribute positively to economic stability if implemented effectively.
Economic Stability Requires Stronger Export Policies
Despite acknowledging positive measures, Zubair Tufail expressed concerns over the absence of more aggressive policies to boost exports. He stated that Pakistan must move beyond stabilization and focus on achieving export-led growth.
According to him, stronger incentives for exporters, improved access to financing, and competitive energy prices are necessary to enhance Pakistan’s position in international markets. He stressed that sustainable economic stability can only be achieved through higher exports and increased industrial production.
Retail Tax Reforms and Business Concerns
Commenting on tax reforms, Zubair Tufail said that bringing retailers under a fixed tax regime could help increase revenue collection for the Federal Board of Revenue (FBR). However, he emphasized that successful implementation would require practical mechanisms and consultation with stakeholders.
He warned that increasing withholding tax rates without addressing structural issues may create difficulties for businesses already operating under challenging economic conditions.
More Focus Needed on Agriculture and Industrial Expansion
The UBG President also urged the government to introduce stronger support measures for agriculture and industry. He said productive sectors remain critical for employment generation, exports, and overall economic stability.
He welcomed the abolition of super tax on incomes up to Rs500 million and the reduction of the super tax rate from 10 percent to 8 percent for higher-income groups. He also appreciated lower withholding taxes on overseas card transactions, reduced taxes on property transactions for filers, and the removal of Federal Excise Duty on international business-class travel.
Karachi Water Projects Need Greater Attention
Zubair Tufail expressed concern over the allocation of only Rs10 billion for the K-IV water supply project. He warned that limited funding could cause further delays in a project that is essential for addressing Karachi’s growing water shortage.
He urged the government to accelerate the completion of the project to provide relief to millions of residents facing water supply challenges.
Conclusion
Zubair Tufail concluded that the Federal Budget 2026-27 has laid a foundation for economic stability, but additional efforts are needed to transform stability into sustained economic growth. He stressed that stronger export policies, investment incentives, industrial expansion, technological advancement, and infrastructure development will be crucial for achieving long-term prosperity and strengthening Pakistan’s economy.
