Pakistan may increase defense spending while cutting the overall budget.

June 10 (Reuters) – Pakistan will release its annual federal budget for the next fiscal year late on Tuesday, seeking to kick-start economic growth while finding resources for the expected increase in defense spending after last month’s conflict with India. Islamabad will also have to contend with the issue of continuing to comply with its International Monetary Fund (IMF) program, as well as uncertainty over the imposition of new tariffs by the United States, its largest export market. The Pakistani government is likely to submit a budget of 17.6 trillion rupees ($62.45 billion) in the new fiscal year, which begins July 1, down 6.7 percent from the current fiscal year, media reports said. The government expects the fiscal deficit to be 4.8% of GDP, compared with a target of 5.9% of GDP for 2024-25, the report said. Analysts said the defense budget is expected to increase by about 20 percent, which could be offset by cuts in R&D spending.