Why was there a need for a massive 20.2% increase in Pakistan's defense budget?
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Why was there a need for a massive 20.2% increase in Pakistan's defense budget?
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Pakistan's decision to implement a massive 20.2% increase in its defense budget for the fiscal year 2025-26, the largest hike in over a decade, is driven primarily by two major factors: * Heightened Tensions with India: * Recent Conflict: Just weeks before the budget announcement in June 2025, PakisRead more
Pakistan’s decision to implement a massive 20.2% increase in its defense budget for the fiscal year 2025-26, the largest hike in over a decade, is driven primarily by two major factors:
See less* Heightened Tensions with India:
* Recent Conflict: Just weeks before the budget announcement in June 2025, Pakistan and India experienced a significant military confrontation in May. This conflict, triggered by a deadly attack in Indian-administered Kashmir which India accused Pakistan of supporting, brought the nuclear-armed neighbors to the brink of a fifth war. The hostilities involved fighter jets, missiles, drones, and artillery over several days.
* Perceived Threats: The Pakistani government views this increase as a necessary response to existential threats and to bolster its military capabilities following this serious escalation. Prime Minister Shehbaz Sharif has even stated that Pakistan needs to “surpass India in the economic field” after “defeating India in a conventional war.”
* Regional Arms Race: India itself increased its defense spending by 9.5% earlier in the year, contributing to a regional arms race dynamic.
* Ongoing Internal Security Challenges:
* Resurgent Militancy: Pakistan has been grappling with a significant resurgence of militancy, primarily from groups like the Tehreek-e-Taliban Pakistan (TTP) and Baloch separatist groups (BLA, BLF).
* Increased Attacks: According to the Global Terrorism Index (GTI) 2025, Pakistan is now the world’s second most terrorism-affected country. In 2024, terrorism-related deaths surged by 45% and attacks more than doubled. The TTP is identified as Pakistan’s primary security challenge, with attacks on police forces particularly increasing. Baloch separatist groups have also significantly escalated their insurgency, targeting security forces, infrastructure, and foreign investments.
* Complex Threat Landscape: The government faces a complex security environment that requires sustained counter-terrorism efforts. This includes addressing cross-border linkages with militant groups and dealing with urban radicalization and politically motivated violence.
Economic Context:
It’s important to note that this substantial increase in defense spending comes at a time when Pakistan’s economy is under considerable strain. The overall budget for FY 2025-26 has seen a 7% decrease in overall spending, with debt servicing consuming a significant portion (nearly half) of the total expenditures. This prioritization of defense spending highlights the government’s perceived urgency of these security challenges, even at the expense of cuts in development spending, infrastructure projects, education, and healthcare. The government is attempting to balance security concerns with ongoing fiscal reform efforts, often under the terms of an IMF loan program.