Federal Finance Minister Muhammad Aurangzeb has dismissed fears of major economic fallout from the recent military escalation with India, calling the financial impact “minor” and manageable. In an interview with Reuters, he emphasized that Pakistan’s fiscal space is strong enough to absorb the effects of the tensions, sparked by the April 22 Pahalgam attack in Indian-occupied Kashmir.
Aurangzeb confirmed that defence needs will be met without compromising economic priorities, but declined to comment on any potential rise in defence spending. He said such discussions were premature at this stage, with the government focused instead on trade and budget planning.
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The finance minister welcomed US President Donald Trump’s mediation, which helped secure a ceasefire after Pakistan’s Operation Bunyan-un-Marsus. He expressed hope for stronger trade ties with the US, revealing plans to import cotton, soybeans, and energy resources to boost Pakistan’s industrial and agricultural sectors.
Aurangzeb also urged India to restore the Indus Waters Treaty, saying water resources must not be politicized. On the financial front, he confirmed that a $1 billion tranche under the IMF bailout had been approved, with an additional $1.4 billion climate loan also cleared. Budget talks with the IMF are scheduled for May 14–23, and the new federal budget will be finalized in June.
