Breaking Down Pakistan’s Federal Budget 2023-24

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Pakistan has released its Federal Budget for 2024. But What Does This Mean?

A federal budget is a crucial plan for a government’s expenditure over a specified period – in this case, the fiscal year. It outlines spending priorities and how revenue will be generated to support those priorities. While we’ve published a detailed report analyzing the budget, we know the numbers can be overwhelming. So let’s go through it together.

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The Purpose of a Federal Budget Is:

  1. To set spending priorities: The budget assists the government in determining which programs and services are most essential and the allocated funds for each.
  2. To raise revenue: It outlines the government’s approach to generating funds for its spending, such as taxes, borrowing, or asset sales.
  3. To manage the economy: The budget can be utilized to stimulate economic growth by increasing spending or to slow down the economy by reducing expenditure.
  4. To ensure government accountability: The budget is a public document that allows citizens to understand how their tax contributions are being utilized.

While the federal budget can be complex, it is crucial for citizens to comprehend its implications for their lives. If you want to watch our video on the impact of the federal budget, click here.

The 2023-2024 Federal Budget

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The 2023-2024 federal budget aims to address the country’s long-term fiscal challenges with a budget of PkR 14.5 trillion, which is a significant increase compared to the previous year’s budget of PkR 9.5 trillion. This allocation aims to support a 3.5% increase in the country’s overall economic output (GDP) and cover the rising costs of debt repayment, which are expected to reach around PkR 7.3 trillion. It encompasses spending on various programs, including healthcare, education, and national defense. Additionally, the budget outlines strategies for revenue generation through taxes, borrowing, and asset sales.

The federal budget significantly influences both the economy and citizens’ lives. It determines the availability of funds for programs and services, as well as affects tax levels and borrowing.
It can stimulate economic growth and job creation by increasing spending. Conversely, reducing expenditure can slow down the economy and result in decreased growth and job losses.
Moreover, the federal budget impacts tax rates and borrowing. When spending exceeds tax revenue, the government must borrow to cover the deficit, potentially leading to the increased national debt, which burdens future generations

Sectors Impacted by Budget FY24

The Pakistan Federal Budget for FY24 brings both positive and negative implications for various sectors.

The budget offers incentives such as duty-free import of IT equipment and reduced taxes, aiming to boost IT exports. Companies like SYS and TRG are identified as top picks within this sector. To find out more about which stocks we recommend and why, visit our YouTube.

In the Agriculture and Fertilizer sectors, the budget introduces incentives and exemptions to promote growth. ENGRO and FFC are identified as top picks due to their diversified business mix and stable demand.

On the other hand, the Commercial Banks sector faces challenges as the imposition of a Super Tax and additional taxes on income and gains impact their profitability. MEBL and MCB are recommended as top picks in this sector due to their strong asset quality and high CASA.

The Auto Industry continues to face difficulties due to import restrictions and currency devaluation. The budget does not propose significant changes, resulting in low volume expectations. INDU is highlighted as a top pick within this sector, benefiting from its high cash balance.

The Textile sector experiences a neutral to negative impact, as the discontinuation of power subsidies and increased Sales Tax by POS retailers may hamper competitiveness and demand. ILP is recommended as a top pick in this sector due to its strong brand value.

Overall, the budget presents winners in the Telecommunication and IT, Agriculture, and Fertilizer sectors, while the Commercial Banks, Auto, and Textile sectors face challenges. It is important to consider the specific implications of the budget on each sector for investment decisions.


The 2023-2024 federal budget represents an ambitious plan that necessitates challenging measures for successful implementation. The government believes that this budget is indispensable in addressing the nation’s long-term fiscal challenges. To find out more about how you can utilize this information to make better investments for you, contact us.