Key points
- No need for new economic assessment: Finmin
- $1b disbursement under the IMF’s $7b bailout agreement soon
- Aurangzeb says budget talks with IMF scheduled from May 14-23
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb has said that the recent military conflict with India would not have a large fiscal impact on Pakistan.
The finance minister said it can be managed within the current fiscal space.
Pakistan has no need for a new economic assessment, he said in an interview with Reuters.
The finance minister also said trade talks with the United States would likely have progress in “short order”.
“Pakistan could import more high-quality cotton, more soy beans,” Aurangzeb said.
On Monday, US President Donald Trump said the US is ready to help India and Pakistan after a ceasefire agreement, claiming trade was a big reason they “stopped fighting.”
Trump pause
Pakistan faces a 29 per cent tariff on exports to the US due to an approximate $3 billion trade surplus, but this is currently under a 90-day pause announced in April.
The International Monetary Fund (IMF) on Friday approved a $1 billion loan disbursement to Pakistan as part of a larger $7 billion bailout agreement.
Aurangzeb said Islamabad would receive the tranche disbursement on Tuesday.
Climate resilience facility
The IMF executive board also approved a fresh $1.4 billion loan to Pakistan under its climate resilience facility.
The federal budget for the next fiscal year, starting July, will be finalised within the next three to four weeks, with scheduled budget talks with the IMF to take place from May 14-23, he said.
Regarding the India-Pakistan conflict, Aurangzeb described it as a “short duration escalation” with minimal fiscal impact, stating it can be “accommodated within the fiscal space which is available to the government of Pakistan.”
