ISLAMABAD/KARACHI – Finance Minister Muhammad Aurangzeb has assured that the recent military escalation with India will not severely affect Pakistan’s economy. He stated that the fiscal impact is minimal and can be handled within the current budget without requiring a new economic review.
In an interview with Reuters on Monday, the finance minister described the conflict as a “short duration escalation.” He emphasized that Pakistan’s financial system is strong enough to manage any temporary shocks without disrupting economic stability. “We have enough fiscal space to absorb the impact,” he said confidently.
Meanwhile, Aurangzeb revealed that trade discussions with the United States are progressing positively following its key role in brokering a ceasefire. He mentioned that Pakistan is looking to import more high-quality cotton and soybeans from the US and is also exploring new investment opportunities, including hydrocarbons.
On the international front, Aurangzeb confirmed that the IMF approved a $1 billion disbursement under the existing $7 billion bailout package. Additionally, a new $1.4 billion climate resilience loan has also been granted. He said the next budget, due in July, is currently being finalized, with key meetings with the IMF scheduled from May 14 to 23.
When asked about possible increases in military spending, the finance minister declined to give specifics but assured that defence needs would be fully met. “It’s too early to talk numbers, but national security remains a priority,” he noted.
Regarding the Indus Water Treaty, which India recently suspended, Aurangzeb expressed hope for its reinstatement. He said Pakistan expects the treaty to return to its original status and is not considering any scenario that excludes its restoration.
