ISLAMABAD – The United States has urged Pakistan to improve Pakistan fiscal transparency by making more information about government spending, debt and sensitive public finances available to parliament and the public.
In its 2026 Fiscal Transparency Report, the US State Department said Pakistan had made progress in publishing important budget documents but continued to face gaps in the disclosure of government debt, the timing of budget proposals and civilian oversight of military and intelligence spending.
The report does not portray Pakistan’s financial system as lacking transparency across the board. Instead, it identifies specific areas where greater disclosure and oversight could strengthen public accountability while also recognising improvements already made by the government.
Pakistan Fiscal Transparency Faces Gaps in Debt Disclosure
One of the report’s main concerns involves Pakistan’s disclosure of government debt.
The US State Department said Pakistan provides only limited public information about its debt obligations, including liabilities linked to major state-owned enterprises. It recommended that the government publish more detailed information about these obligations.
The issue matters because state-owned enterprises can carry significant liabilities that ultimately affect public finances.
Pakistan’s own data shows the scale of this challenge. Government figures reported in 2026 put total state-owned enterprise debt at around Rs9.57 trillion, alongside other liabilities and contingent obligations.
Greater disclosure would allow parliament, investors and citizens to better understand the risks facing the country’s finances.
US Calls for Greater Civilian Oversight of Military Spending
The report also highlighted the level of parliamentary and civilian oversight over military and intelligence budgets.
According to the State Department, these budgets were not subject to adequate parliamentary or civilian public oversight. It recommended that Pakistan strengthen such oversight as part of broader fiscal accountability measures.
The recommendation is particularly significant because defence spending represents a substantial part of Pakistan’s federal expenditure.
Pakistan’s parliament approved a defence allocation of around Rs3 trillion in the 2026-27 budget, including a provincial contribution, according to reporting on the budget.
The US report’s recommendation therefore centres on how public resources are scrutinised, rather than simply how much the government spends.
Budget Proposal Publication Also Needs Improvement
The State Department identified another gap in the timing of Pakistan’s budget disclosures.
It said Pakistan did not publish its executive budget proposal within a reasonable period. The report recommended that the proposal become publicly available on time so citizens and lawmakers can examine government plans before the budget process concludes.
Timely publication gives parliament, analysts, businesses and the public greater opportunity to study proposed spending and revenue measures.
For a country managing high debt and relying on international financial support, the quality and timing of fiscal information can also influence confidence in economic management.
Pakistan Has Made Progress on Public Budget Information
Despite its criticism, the report also recognised several positive developments in Pakistan’s financial reporting.
The State Department said Pakistan made its enacted budget and end-of-year report widely accessible, including online. It also found that publicly available budget documents provided a substantially complete picture of most planned government revenues and expenditures.
The report further noted that Pakistan’s budget information was generally reliable and subject to auditing by the country’s supreme audit institution.
It said the institution met international standards of independence and that audit reports became publicly available within a reasonable period.
These findings suggest that the issue is not simply whether Pakistan publishes financial information, but whether it publishes all relevant information with enough detail and within a useful timeframe.
Pakistan Defends Its Fiscal Management
Pakistan has defended its approach to fiscal transparency, pointing to its legal and constitutional framework and ongoing economic reforms.
Foreign Office spokesperson Tahir Andrabi said Pakistan follows internationally established practices on fiscal transparency, budgeting and financial disclosure within its constitutional, legal and regulatory framework.
He also pointed to Pakistan’s ongoing IMF programme and said its structural reforms and fiscal management measures have received recognition from the IMF and international credit rating agencies.
The government’s position highlights the progress made through recent fiscal reforms, while the US report focuses on areas where additional disclosure and oversight could strengthen accountability.
What The Fiscal Transparency Report Means For Pakistan
The latest assessment presents a mixed picture of Pakistan’s public finances.
On one hand, the government has expanded public access to key budget documents, maintained an audit system that the US considers broadly independent and made significant fiscal information available online.
On the other hand, the Pakistan fiscal transparency debate continues around debt disclosure, the timing of budget proposals and civilian oversight of sensitive spending.
The challenge for Islamabad now is to close those gaps without compromising legitimate national security concerns.
Greater transparency does not necessarily mean publishing sensitive operational information. It can instead mean giving parliament and the public a clearer picture of how public money is allocated, what obligations the state carries and how those funds are audited.
For Pakistan, stronger fiscal transparency could ultimately serve both sides of the debate: improving public accountability while strengthening confidence in the country’s economic management.
Key Points:
- The US has urged Pakistan to improve Pakistan fiscal transparency and public accountability.
- The State Department identified limited disclosure of government and state-owned enterprise debt as an area for improvement.
- It called for greater parliamentary or civilian oversight of military and intelligence budgets.
- The US also criticised the delayed publication of Pakistan’s executive budget proposal.
- The report recognised that Pakistan publishes its enacted budget and year-end report online.
- It also said Pakistan’s supreme audit institution meets international independence standards and makes audit reports publicly available.
- Pakistan has defended its fiscal practices and pointed to reforms under its ongoing IMF programme.
- The report ultimately presents a mixed picture, recognising progress while calling for greater disclosure and oversight.
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