The federal government is reviewing proposals to increase salaries and pensions for government employees and retired workers in the upcoming Budget 2026–27.
According to officials, the proposed increase may range between 5% and 10%, depending on available financial resources and ongoing discussions with the International Monetary Fund.
Authorities are currently evaluating different relief measures as inflation continues to affect household expenses across the country. Officials estimate that average inflation for the current fiscal year may remain around 7.5%, which has increased pressure to provide financial support to public sector workers and pensioners.
Along with salary and pension proposals, the government is also considering introducing a Defined Contributory Pension (DCP) system for armed forces personnel. A similar system has already been implemented for newly recruited civilian employees as part of pension reform efforts.
The proposed pension model is aimed at reducing long-term financial pressure on the national budget while improving sustainability of pension payments in the future. Discussions are ongoing regarding how the new structure may be implemented for military personnel.
Officials said final decisions regarding salary increases, pensions and tax relief measures will depend on fiscal space and approval from the IMF under ongoing economic negotiations.
At the same time, authorities are also reviewing possible tax relief for salaried individuals in the next budget to provide some support against rising living costs.
Economic experts believe the upcoming budget will play an important role in balancing public relief measures with fiscal discipline. The government is expected to announce final proposals after completing consultations with financial institutions and reviewing overall economic conditions in the country.
