Economic experts welcome fiscal plan; Business chambers hail Federal Budget 2025–26
PESHAWAR (APP): Economic experts and business leaders in Khyber Pakhtunkhwa have broadly welcomed the Federal Budget 2025–26, describing it as balanced, people-friendly, and aligned with ongoing reform efforts of the government.
Analysts praised the government’s focus on fiscal consolidation and economic stimulus, predicting that the budgetary measures announced would support industrialization, boost exports, and reduce energy costs.
The government’s ambitious 4.2% GDP growth target and increased reliance on the existing taxpayer base were also seen as achievable.
“The budget announced by the government is very much in line with peoples expectations as a balanced budget,” said Dr. Yousaf Sarwar, former President of the Sarhad Chamber of Commerce and Industry (SCCI).
“The government is ensuring that current reforms stay on track as part of Pakistan’s fiscal consolidation efforts.”
He emphasized that the budget aligns with commitments under the ongoing $7 billion IMF loan program while aiming to revive investor sentiment and ease the burden on salaried individuals.
Key reforms highlighted include tax base expansion, broadening tax net and phasing out exemptions.
Revenue mobilization was linked with an increasing taxes on interest income, gradual reduction of super tax, and enhanced collection measures that was widely hailed in Khyber Pakhtunkhwa.
The experts said debt rationalization will help lowering debt servicing costs through concessional financing and restructuring.
“The government has tried to maintain a balance between austerity and social protection,” Dr. Sarwar noted, citing relief for the salaried class and phased super tax reduction.
Dr. Sarwar described the 4.2% GDP growth target as “realistic,” crediting strong agricultural performance and improving industrial indicators.
“Agriculture is a bright spot, and as interest rates come down, we expect the sector to be a key contributor in upcoming fiscal year,” he added.
Dr. Muhammad Naeem, former Chairman of the Economics Department at the University of Peshawar, also praised the budget’s balanced approach compared to previous years.
“In contrast to the stricter budgets of the past two years, this one includes both reform measures and many relaxation,” he said.
He welcomed tax relief for salaried workers, incentives for the construction sector, and a positive trajectory in Public Sector Development Programme (PSDP) allocations. These measures, he added, would benefit allied industries including auto manufacturing.
Dr. Naeem viewed the 2.4% primary surplus target as “optimistic but achievable,” asserting that the budget lays the foundation for sustained economic growth.
“With declining interest rates, both agriculture and industry are poised to contribute meaningfully toward the GDP target,” he said.
The budget’s pro-investor stance also drew market support. Analysts noted a strong rally of progress on stock exchange following the budget announcement.
“We’re in an IMF program, and this is a decent, reform-oriented budget. All signs indicate that the market may reach new heights in the coming months,” said Dr. Naeem.
Sector-specific incentives were particularly favorable for cement, steel, and textile industries, driven by subsidies for low-cost housing and the removal of regional tax exemptions — steps expected to benefit domestic manufacturers.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Peshawar Chamber of Commerce and Industry (KCCI) also welcomed the budget, describing the targets as achievable—provided key reforms are implemented and energy costs are brought down.
Atif Ikram Sheikh, President of FPCCI, appreciated the relief measures, especially for salaried individuals and the property sector, and welcomed the simplified tax return system.
“We appreciate efforts to ease compliance for taxpayers. However, meeting the ambitious tax collection target of Rs2,500 billion ($8.8 billion) will require significant effort,” he cautioned.
FPCCI also called for targeted support packages for key sectors such as IT, minerals, fishing, and e-commerce.
The Sarhad Chamber of Commerce and Industry (SCCI) reaffirmed its commitment to engage constructively with the government.
President Fazal Moqeem Khan expressed hope that the federal government would incorporate the Chamber’s recommendations, particularly to support industries in regions like Khyber Pakhtunkhwa that have faced economic setbacks.
“We understand the constraints under the IMF program but believe that a progressive and inclusive economic roadmap is still achievable,” he said.
Haji Muhammad Afzal, regional representative of FPCCI, urged the government to review taxation policies and ensure they benefit both large industries and small traders alike.
Former FPCCI President Ghazanfar Bilour echoed this sentiment, emphasizing protection for the middle class and policies that encourage domestic investment.
“Creating an enabling environment can turn economic challenges into opportunities and help retain valuable local capital,” he said.
The SCCI leadership stressed that a truly business-friendly budget is vital for long-term economic and social development. They called on the government to roll back excessive powers granted under recent FBR regulations and offer targeted incentives to boost productivity, exports, and employment.
The Chamber expressed confidence in the government’s willingness to consult stakeholders and reiterated its readiness to collaborate for national economic progress.
“We urge all stakeholders to work together toward a budget that is fair, forward-looking, and inclusive,” the SCCI stated.
The experts congratulated Prime Minister Muhammad Shehbaz Sharif and his financial team for presenting a relief oriented and growth oriented budget by winning hearts and minds of people.
