- The Minister of Finance says that the impact must be managed within the framework of the current budgetary space.
- Aurangzeb optimistic no new economic assessment would be necessary.
- “Pakistan could import more high quality cotton, more soy.”
The recent military escalation with Arch-Rival India will not have a significant budgetary impact on Pakistan and can be managed in the current budgetary space, without the need for a new economic assessment, the Minister of Finance, Mohammad Aurangzeb said on Monday.
“Trade negotiations with the United States, which had played a key role by mediating a ceasefire between the two countries, would probably progress in” short term “,” said Auragzeb in an interview with Reuters.
Consequently, he added, Pakistan could import more high quality cotton, more soybeans and also explored other asset classes, including hydrocarbons.
On Monday, US President Donald Trump said the United States was ready to help India and Pakistan after a cease-fire agreement, saying trade was a great reason they “stopped fighting.”
Pakistan faces a price of 29% on exports to the United States due to a trade surplus of approximately $ 3 billion, but it is currently a 90-day break announced in April.
On Friday, the International Monetary Fund (IMF) approved a loan disbursement of $ 1 billion in Pakistan as part of a rescue agreement of $ 7 billion.
Aurangzeb said that Islamabad would receive the disbursement of the tranche on Tuesday.
The IMF board of directors has also approved a new loan of $ 1.4 billion in Pakistan as part of its ease of climate resilience.
The federal budget for the next financial year, from July, will be finalized in the next three to four weeks, with budget talks planned with the IMF which take place from May 14 to 23, he said.
Regarding the India-Pakistan conflict, Aurangzeb described it as a “short-term escalation” with a minimum budget impact, declaring that it can be “accused in the budgetary space which is available for the Government of Pakistan”.
Asked about potential increased increased military expenditure in the upcoming budget, Aurangzeb postponed the comments, saying that it was premature to discuss specific plans.
However, he said: “Everything we have to do in terms of guarantee that our defense requirements are met.”
Tensions between India and Pakistan began to light up after the attack on April 22 in Pahalgam in Indian illegally occupied Jammu and Kashmir (iiojk) on tourists who killed 26 people, causing the worst clashes between nuclear armed neighbors for more than two decades.
On Saturday, a ceasefire in the Himalayan region was announced by Trump, after four days of fighting, diplomacy and pressure from Washington.