ISLAMABAD: Pakistan’s recent military escalation with neighbouring India will not impact the country’s fiscal outlook, said Finance Minister Muhammad Aurangzeb in an interview with Reuters on Monday.
He was describing the conflict as a “short duration escalation,” Aurangzeb assured that any financial strain from the military activity can be accommodated within the government’s existing fiscal framework.
Furthermore, Aurangzeb also commented on ongoing trade relations, expressing optimism about improved economic engagement with the United States, which played a key role in brokering the ceasefire.
In addition, earlier, US President Donald Trump mentioned that the United States facilitated the recent ceasefire between the two nuclear-armed neighbours, saying trade was a major factor in defusing tensions.
Pakistan currently faces a 29% tariff on its exports to the US., linked to a $3 billion trade surplus. However, these tariffs are under a 90-day pause announced in April.
Moreover, the International Monetary Fund (IMF) on Friday approved a $1 billion disbursement to Pakistan under a broader $7 billion bailout package.
Also Read: Pakistan and India agree to full ceasefire following US mediation
Meanwhile, the federal budget for the next fiscal year, beginning in July, is expected to be finalised within the next three to four weeks. Budget talks with the IMF are scheduled for May 14–23.
