The United States has called on Pakistan to strengthen civilian oversight of public finances and improve transparency in government spending, saying greater access to financial information is essential for stronger fiscal management and accountability.
The recommendations were included in the US State Department’s 2026 Fiscal Transparency Report on Pakistan, which reviewed the country’s public financial systems, budget disclosures and availability of government spending information.
According to the report, Pakistan has made progress in making some budget information publicly accessible but continues to face shortcomings in several important areas, particularly regarding government debt and oversight of military and intelligence expenditures.
The US State Department said Pakistan does not currently provide sufficient public information about certain government financial obligations. It specifically highlighted limited disclosure of government debt, including liabilities associated with major state-owned enterprises.
The report also raised concerns about the level of parliamentary and civilian oversight of military and intelligence budgets.
US seeks greater civilian oversight
The State Department said military and intelligence expenditures were not subject to adequate parliamentary or civilian public scrutiny.
It recommended that Pakistan strengthen mechanisms allowing elected representatives and civilian institutions to examine these expenditures as part of broader efforts to improve fiscal accountability.
The report argued that greater transparency over public finances could help strengthen confidence in the country’s financial management and ensure that government spending is subject to appropriate oversight.
The US assessment also identified the timely publication of Pakistan’s executive budget proposal as an area requiring improvement.
According to the report, Pakistan did not make the executive budget proposal publicly available within a reasonable period, limiting the ability of citizens and other stakeholders to examine proposed government spending before the budget process was completed.
The State Department recommended that Pakistan publish the executive budget proposal on time and provide more detailed information about government debt.
Debt transparency highlighted
Government debt was another major area highlighted in the report.
The US State Department said Pakistan provides only limited information regarding its overall debt obligations, including debt linked to major state-owned enterprises.
The report recommended that authorities disclose more comprehensive information about these obligations so that citizens, lawmakers and other stakeholders can better understand the country’s fiscal position.
Greater disclosure of state-owned enterprise debt could also provide a clearer picture of the financial risks facing the government, particularly where public institutions carry significant liabilities.
Report acknowledges progress
Despite its criticism, the US report also recognised several areas in which Pakistan has made progress.
It said Pakistan makes its enacted budget and year-end financial report widely available to the public, including through online platforms.
The State Department also noted that publicly accessible budget documents provide a substantially complete picture of most planned government revenues and expenditures.
According to the assessment, Pakistan’s budget information is generally reliable and undergoes audits by the country’s supreme audit institution.
The report further stated that the supreme audit institution meets international standards regarding independence and that audit reports are made publicly available within a reasonable period.
These findings indicate that Pakistan already has several important elements of a functioning public financial transparency system, although the US assessment called for improvements in specific areas.
Pakistan responds to US assessment
Pakistan has also responded to the report through the Foreign Office.
Foreign Office spokesperson Tahir Andrabi said Pakistan follows internationally established practices relating to fiscal transparency, budgeting and financial disclosure.
He said these practices are implemented within Pakistan’s constitutional, legal and regulatory framework.
Andrabi also referred to Pakistan’s ongoing programme with the International Monetary Fund (IMF), noting that the country’s structural reforms and fiscal management measures have received recognition from the IMF as well as international credit rating agencies.
Pakistan’s response suggests that the government believes ongoing economic reforms are strengthening the country’s fiscal management framework.
The issue of fiscal transparency has gained increasing importance as Pakistan continues efforts to improve public finances, strengthen revenue collection and manage its debt obligations.
The US report’s recommendations come at a time when Pakistan is implementing economic reforms under its IMF programme and seeking to maintain greater stability in its external and domestic finances.
Improved disclosure of government debt, timely publication of budget proposals and stronger civilian oversight could help provide a more comprehensive picture of public finances.
The report ultimately presents a mixed assessment of Pakistan’s fiscal transparency. While recognising improvements in budget accessibility, reliability and auditing, the US State Department has urged further reforms to ensure greater public access to financial information and stronger civilian oversight of government spending.
Also read: US Moves Toward Mandatory Online Immigration Filing
