Islamabad, June 10, 2025: The federal cabinet on Tuesday approved the Budget for the fiscal year 2025–26, which includes a 10% increase in salaries for government employees and a 7% hike in pensions for retired personnel.
The decision, reflecting changes from earlier proposals, was finalized during a high-level cabinet meeting chaired by Prime Minister Shehbaz Sharif in Islamabad.
During the session, Prime Minister Sharif reaffirmed his administration’s commitment to economic stability and fiscal discipline. He pointed to encouraging economic indicators — including growth in exports, especially in the IT sector, and a rise in remittances — as signs of resilience in Pakistan’s economy.
Acknowledging the financial strain faced by the salaried class, the Prime Minister noted the rising tax burden on government employees. The 10% salary increment aims to offer much-needed relief to civil servants amid ongoing economic pressures.
In addition to pay raises, the cabinet approved a 7% increase in pensions, further supporting the welfare of retired government employees. The Prime Minister expressed satisfaction with the budget’s pro-people orientation and commended the Ministry of Finance for its work in preparing the fiscal plan.
Prime Minister Sharif also touched on broader national issues, reiterating Pakistan’s position in regional security matters. He asserted that Pakistan had maintained strategic superiority in conventional warfare with India and emphasized the importance of unity for sustained economic growth. He also reaffirmed Pakistan’s commitment to water sovereignty and continued diplomatic support for the Kashmir and Palestine causes.
The salary and pension increases in Budget 2025–26 underscore the government’s effort to support its workforce while navigating a complex regional and global economic landscape.
