ISLAMABAD: The recent military escalation with arch-rival India won’t have a large fiscal impact on Pakistan and can be managed within the current fiscal space, with no need for a new economic assessment, Finance Minister Muhammad Aurangzeb said in an interview with a foreign news agency.
Trade talks with the United States – which had played a key role mediating a ceasefire between the two countries – would likely have progress in “short order” and that Pakistan could import more high-quality cotton, more soy beans and was also exploring other asset classes, including hydrocarbons, the minister said in the online interview.
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.”
Aurangzeb said he expects the Indus Waters Treaty, which India unilaterally suspended, to be reinstated and rolled back to where it was.
He said there is not going to be any immediate impact from India’s suspension and Pakistan does not “even want to consider any scenario which does not take into account the reinstatement of this treaty.”
