Govt unveils Rs3.675 tr development plan, eyes 4% growth, 3.8 bn current account surplus in FY27

ISLAMABAD, Jun 12 (APP): The federal government on Friday unveiled the Annual Plan 2026-27, setting a 4 percent GDP growth target and a Rs3.675 trillion national development outlay, while projecting a current account surplus and higher exports, remittances and investment during the next fiscal year.

According to the Annual Plan, the agriculture sector is projected to grow by 3.6 percent, supported by initiatives under the URAAN Pakistan programme, improved availability of agricultural inputs and gradual adaptation to climate-related challenges.

The industrial sector is targeted to expand by 4.5 percent, driven by improved performance of large-scale manufacturing, mining and quarrying activities, and continued momentum in the construction sector. The services sector is expected to grow by 4.2 percent on the back of increased economic activity in commodity-producing sectors.

The government has targeted total investment at 15 percent of GDP and national savings at 14.3 percent of GDP, with policymakers expecting fiscal discipline, lower interest rates and ongoing structural reforms to support economic activity.

On the external front, the Annual Plan projects a current account surplus of $3.8 billion, equivalent to 0.7 percent of GDP, despite expectations of higher international energy and commodity prices.

Goods exports have been targeted at $32.9 billion, while services exports are projected at $11.3 billion. Goods imports are estimated at $70 billion and services imports at $13.8 billion. Workers’ remittances are expected to reach $42.4 billion during FY27.

The government has also unveiled a national development outlay of Rs3.675 trillion for FY27, comprising a Rs1 trillion Federal Public Sector Development Programme (PSDP), Rs2.224 trillion in provincial Annual Development Programmes (ADPs) and Rs451 billion in investments by State-Owned Enterprises (SOEs).

Among the provinces, Sindh has proposed the largest development programme of Rs770 billion, followed by Punjab with Rs749 billion, Khyber Pakhtunkhwa Rs455 billion and Balochistan Rs250 billion.

The federal PSDP places major emphasis on infrastructure, energy, water and connectivity projects. Key allocations include Rs100 billion for three packages of the N-25 Quetta-Karachi Highway, Rs30 billion for the Sukkur-Hyderabad Motorway (M-6), and Rs25 billion for the upgradation of Pakistan Railways Main Line-1 (ML-1).

The government has also proposed to allocate Rs26 billion for the Mohmand Dam Hydropower Project, Rs21 billion for the Dasu Hydropower Project and Rs14 billion for the Diamer-Bhasha Dam Project, including land acquisition and associated works.

In the social sector, allocations include Rs22 billion for the establishment of Daanish Schools, Rs18 billion for the Prime Minister’s Youth Programme and Rs11 billion for the development of IT Parks in Islamabad and Karachi.

The Annual Plan also envisages strengthening climate resilience and water infrastructure, with Rs17 billion earmarked for the Integrated Flood Resilience and Adaptation Project in Balochistan and Rs10 billion for the Greater Karachi Bulk Water Supply Scheme (K-IV).

Meanwhile, the government has set an information technology and telecommunications export target of $7.3 billion for FY27 as part of efforts to boost the country’s digital economy and export earnings.