Islamabad, May 16: Pakistan is expected to raise its defence budget by about PKR 100 billion in the upcoming fiscal year as the government prepares its budget under an International Monetary Fund (IMF)-backed reform programme that projects a sharp rise in revenues, according to a media report.

The Dawn newspaper, citing the IMF staff report issued after the completion of the third review of the USD 7 billion Extended Fund Facility (EFF) and the second review of the USD 1.4 billion Resilience and Sustainability Facility (RSF), reported that defence expenditure for 2026-27 was estimated at Pakistani rupees (PKR) Rs 2.665 trillion, up from PKR 2.564 trillion this year.

The IMF projected Pakistan’s total federal revenues for 2026-27 at PKR 17.144 trillion – that’s more than PKR 2 trillion higher than the current fiscal year and represents a 13.5 per cent increase, the report said.

It said Pakistan had also committed to increasing the combined expenditure of the federal and provincial governments by 0.2 per cent of GDP to a total of PKR 4.227 trillion, while digitising all federal and provincial government payments by June 2027.

As part of wider reforms linked to the IMF programme, the government will identify the 10 top corruption-prone institutions by the end of this year for detailed analysis and audit. The provincial anti-corruption agencies are also expected to be strengthened.

The government has also given an undertaking not to introduce new incentives for special economic zones, export processing zones, and special technology zones, while phasing out existing incentives by 2035 to create what the report described as a level playing field for all.

The paper said that authorities have maintained that apart from those living in absolute poverty and receiving social income support, around 40 per cent of the population remained economically vulnerable.

An IMF staff mission is currently in Pakistan to finalise budget proposals before the budget 2026-27 is presented to the cabinet and the parliament early next month.

Washington, May 16: US President Donald Trump returned from a visit to China, describing his discussions with President Xi Jinping as a meeting between the leaders of two great countries.

Trump landed at Joint Base Andrews in Maryland on Friday evening, claiming to have secured significant trade agreements, including the sale of 200 aircraft from Boeing to China, with a promise for an additional 750. He also highlighted a commitment to support the American agriculture sector.

The US President made a brief refuelling stop in Anchorage, Alaska, before returning.

In an interview with Fox News following his meeting with Xi on Thursday, Trump said, “It’s the two great countries. I call it the G-2. I think it’ll go down as a very important moment in history.”

The Washington Post reported that Trump’s remarks put China on an equal footing with the US, which was a goal Xi had sought to achieve during the visit.

“Over two days of meetings here, the carefully choreographed pageantry and the reciprocal gestures of friendship and respect between the world’s two most powerful men displayed a geopolitical dynamic that the Chinese have long craved and Americans had resisted,” the Post said.

Trump told Fox News that the relationship with Xi was important and suggested that China may not resort to any aggressive moves over Taiwan, at least till he is in office.

“It’s not a takeover. They just don’t want to see this place — we’ll call it a place because nobody knows how to define it — but they don’t want to see it go independent,” Trump said.

“I don’t think they’ll do anything when I’m here. When I’m not here. I think they might, to be honest with you,” Trump said.

“I want them to cool down. I want China to cool down. We’re not looking to have wars, and if you kept it the way it is, I think China’s going to be OK with that,” Trump stated.

The US President also informed that he had invited Xi to visit Washington in September.