The National Economic Council (NEC) on Wednesday slashed the country's overall development outlay by 25 per cent to Rs3.218 trillion for fiscal year 2026-27, with Punjab absorbing the deepest cut as provinces agreed to redirect Rs920 billion to the federal centre to meet defence and external financing needs.

Chaired by Prime Minister Shehbaz Sharif, the council also approved a 4 per cent GDP growth target, an inflation projection of 8.2 per cent, and a current account deficit of $3.6 billion for the next fiscal year.

Federal PSDP was reduced sharply, and several mega projects in transport and energy will be re-phased over additional years. Officials said the trimmed plan was a 'realistic re-set' aligned with IMF programme parameters.