Pakistan’s recent military standoff with India won’t put significant pressure on the country’s finances, according to Finance Minister Muhammad Aurangzeb. In an interview with Reuters on Monday, he explained that the escalation was brief and any related costs can be handled within the current budget framework—no new economic assessment is needed.
Aurangzeb also said Pakistan’s trade discussions with the United States, which helped broker the recent ceasefire, are expected to move forward soon. Talks include the possibility of increasing imports of U.S. goods like high-quality cotton, soybeans, and even exploring energy resources such as hydrocarbons.
Meanwhile, U.S. President Donald Trump commented on the ceasefire, saying trade played a big role in getting both countries to halt the fighting and added that Washington is willing to continue helping both sides.
On the trade front, Pakistan is currently facing a 29% tariff on its exports to the U.S., due to a roughly $3 billion trade surplus. However, those tariffs are under a 90-day suspension announced in April, providing some breathing room for negotiations.
In a financial boost, the International Monetary Fund (IMF) just approved a $1 billion loan disbursement to Pakistan as part of a $7 billion bailout program. Pakistan will receive that payment on Tuesday. The IMF has also approved an additional $1.4 billion under a climate resilience program.
As for the upcoming federal budget, Aurangzeb said it’s being finalized and should be ready within the next three to four weeks. Talks with the IMF regarding the budget are scheduled from May 14 to 23.
When asked if military spending would increase due to the recent conflict, Aurangzeb said it’s too early to give specifics but assured that national defense needs would be fully met.
He also addressed India’s recent suspension of the Indus Water Treaty, expressing confidence that the agreement would be restored. “We don’t even want to consider a scenario where it isn’t,” he said.
Tensions between India and Pakistan escalated after a deadly April 22 attack in Indian-controlled Kashmir that killed 26 Hindu tourists. The situation reached its peak with cross-border fighting but was de-escalated following a U.S.-mediated ceasefire announced over the weekend.
