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Pakistan to hike defense spending, cut overall budget for 2025–26

In comparison, India has raised its 2025–26 defense budget to $78.7 billion, with $21 billion set aside for equipment.

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Pakistan is set to unveil its federal budget on Tuesday, projecting a 6.7% cut in total spending to 17.6 trillion rupees ($62.45 billion) for the 2025–26 fiscal year, while likely increasing defence expenditure by around 20% in the wake of last month’s conflict with India.

Officials expect a fiscal deficit of 4.8% of GDP, down from this year’s 5.9% target. Defence spending, currently at 2.1 trillion rupees ($7.45 billion), is expected to rise, mostly funded through cuts in development spending. 

An additional 563 billion rupees ($1.99 billion) for military pensions remains outside the official defence budget.

In comparison, India has raised its 2025–26 defence budget to $78.7 billion, with $21 billion set aside for equipment.

Pakistan’s economic growth for 2025–26 is projected at 4.2%, up from 2.7% this year, but still below regional averages. The government aims to maintain IMF compliance by expanding the tax base—particularly in agriculture and retail—and cutting subsidies. 

Just 1.3% of Pakistanis paid income tax in 2024, highlighting the scale of reform needed.

Finance Minister Muhammad Aurangzeb said the government is focused on sustaining macroeconomic stability and avoiding past “boom and bust” cycles.

However, analysts warn that IMF conditions and structural inefficiencies could hamper growth. S&P economist Ahmad Mobeen expects the revenue target to fall short due to poor implementation and lack of real tax reform.

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Armed men kidnap, kill nine bus passengers in Pakistan, say officials

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Armed men killed nine bus passengers after kidnapping them in Pakistan’s southwestern Balochistan province, officials said on Friday.

The passengers had been kidnapped from multiple buses on Thursday evening, said the provincial government spokesman Shahid Rind, Reuters reported.

Their bodies with bullet wounds were found in mountains overnight, another government official Naveed Alam said.

No one has claimed responsibility.

Separatist Baloch militants have in the past been involved in such incidents, killing passengers after identifying them as coming from the eastern Punjab province.

The Baloch Liberation Army is the strongest of a number of insurgent groups long operating in the area bordering Afghanistan and Iran, a mineral-rich region.

The ethnic Baloch militants blame authorities in Pakistan for stealing their regional resources to fund spending in Punjab province.

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Russia’s Lavrov meets Iran’s Araqchi, renews offer to help solve conflict

Russia has said it is ready to act as a mediator in the crisis pitting Iran against Israel and the United States and has offered to store Iranian uranium.

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Russian Foreign Minister Sergei Lavrov met on Sunday with his Iranian counterpart at the BRICS summit, and restated Moscow’s offer to help resolve disputes around Tehran’s nuclear programme, the Russian Foreign Ministry said.

A ministry statement said Lavrov, in his talks in Rio de Janeiro with Abbas Araqchi, issued a new denunciation of Israeli and U.S. strikes on Iran last month, “including the bombing of nuclear energy infrastructure under safeguards of the International Atomic Energy Agency.”

Lavrov, the statement said, stressed that all issues surrounding Iran’s nuclear programme had to be resolved through diplomacy, Reuters reported.

“Moscow expressed its readiness to offer its assistance in finding mutually acceptable solutions, including the corresponding initiatives put forward earlier by the Russian president,” it said.

Araqchi held talks in Moscow in the middle of the 12 days of conflict last month.

Iran denies it has any intention of developing nuclear weapons. Russia, which has a strategic partnership with Iran, though without a mutual defence provision, says Tehran has the right to a peaceful nuclear energy programme.

Russia has said it is ready to act as a mediator in the crisis pitting Iran against Israel and the United States and has offered to store Iranian uranium, read the report.

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Iran’s Khamenei attends public event after weeks of war with Israel

For apparent security reasons, Khamenei had issued pre-taped messages during the war which started on June 13, and avoided public appearances.

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Iran’s Supreme Leader Ayatollah Ali Khamenei attended a religious event on Saturday, according to a video carried by state television, after reports that he was in a “secure location” since the start of a 12-day air war with Israel in which top Iranian commanders and nuclear scientists were killed, Reuters reported.

The video carried by state media showed dozens attending a ceremony to mark Ashura, the holiest day of the Shi’ite Muslim calendar, standing chanting as Khamenei entered a hall where many government functions are held.

For apparent security reasons, Khamenei had issued pre-taped messages during the war which started on June 13, and avoided public appearances.

On June 26, in pre-recorded remarks aired on state television, Khamenei promised that Iran would not surrender despite U.S. President Donald Trump’s calls, read the report.

 

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