Finance Minister Sees No Extra Burden in Next Budget Due to Conflict With India

Pakistan’s latest military dogfight with India is not expected to put any pressure on the 2025-26 budget, Finance Minister Muhammad Aurangzeb told Reuters on Monday. He assured that the fiscal impact remains manageable within existing resources and does not require a fresh economic assessment. He also confirmed that Pakistan is on track to receive a $1 billion disbursement from the International Monetary Fund on Tuesday. Aurangzeb expressed optimism about the resumption of trade talks with the United States, which played a key role in mediating a ceasefire between India and Pakistan. He noted potential growth in imports of high-quality cotton, soybeans, and hydrocarbons. Regarding the recent conflict, Aurangzeb described it as a short-lived escalation with limited fiscal consequences. He briefly added that Pakistan’s defense needs would be met if needed. Aurangzeb also expects the Indus Water Treaty to be reinstated and does not anticipate any long-term disruptions. Tensions between the two nuclear-armed neighbours spiked after an April 22 attack in Indian-Illegally Occupied Kashmir that killed 26 tourists. A ceasefire was announced on Saturday following four days of intense clashes.