ISLAMABAD: Pakistan鈥檚 Planning Minister Ahsan Iqbal said on Monday that the Finance Division has allocated Rs1 trillion ($3.5 billion) for development projects in the upcoming budget for fiscal year 2025-26.

The 2025鈥�26 budget is expected to be presented by Finance Minister Muhammad Aurangzeb in Pakistan鈥檚 lower house of parliament on June 10, following the Eid Al-Adha holidays, after the government postponed an earlier date of June 2.

Providing the breakdown $3.5 billion development budget, Iqbal said Rs664 billion ($2.3 billion) would be allocated to infrastructure projects, including energy, water, transport, physical planning and housing.

鈥淧rime Minister Shehbaz Sharif has directed that Rs120 billion ($426.7 million) be allocated for N25 Chaman-Quetta-Karachi Expressway,鈥� he said at a press conference in Islamabad.

鈥淩s150 billion ($533.3 million) are for social sectors, special areas, including Azad Jammu and Kashmir and Gilgit-Baltistan, have been allocated Rs63 billion ($223.9 million), and merged [tribal] districts in Khyber Pakhtunkhwa have been allocated Rs70 billion ($248.4 million).鈥�

Similarly, Rs53 billion ($188.3 million) have been earmarked for science and information technology, Rs9 billion ($32.2 million) for governance and reform projects, and Rs11 billion ($39.1 million) for production sectors, according to the minister.

鈥淭he majority [of allocation] is for water, power and highway sector,鈥� he added.

Late last month, Iqbal said Pakistan鈥檚 defense spending would be hiked in the upcoming budget as the military would 鈥渃ertainly require鈥� more financial resources to defend the country against India. But neither Iqbal nor any other government official has so far shared any figures. Pakistan鈥檚 defense budget currently stands at Rs2.122 trillion ($7.53 billion).

The remarks came days after Pakistan and India attacked each other with missiles, drones and artillery in their worst conflict in decades that killed around 70 people on both sides. The two nations agreed to a ceasefire on May 10 after four days of hostilities sparked by a militant attack on tourists in Indian-administered Kashmir in April.

Pakistan鈥檚 annual inflation rate rose to 3.5% in May, though the country鈥檚 macroeconomic outlook has improved in recent months, supported by a stronger current account balance, increased remittances and declining inflation.

Authorities remain cautious as they aim to build on recent economic stabilization, guide the country toward gradual growth, and reaffirm their commitment to ongoing economic reforms.