Missile strikes spark India-Pakistan clashes; cardinals gather to choose new pope
In this episode of W News, presented by Leigh-Ann Gerrans, we report on India and Pakistan exchanging heavy artillery fire after deadly Indian missile strikes – marking the worst cross-border violence between the nuclear-armed rivals in two decades. We'll also bring you the latest from the Vatican, where the doors of the Sistine Chapel have closed, marking the start of the conclave to elect Pope Francis' successor. A total of 133 cardinals will cast their votes.
Guests:
Inzamam Rashid – Journalist
Jan Achakzai – Geopolitical analyst
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Arab News
2 hours ago
- Arab News
Pakistan likely to hike defense spending but slash overall budget in 2025-26
ISLAMABAD: Pakistan will unveil its annual federal budget for the coming fiscal year later on Tuesday, seeking to kickstart growth while finding resources for an expected hike in defense expenditure following the conflict with India last month. Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund program and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market. Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7 percent from this fiscal year. It has projected a fiscal deficit of 4.8 percent of GDP, against a targeted 5.9 percent deficit in 2024-25, the reports say. Analysts said they expect an increase of around 20 percent in the defense budget, likely offset by cuts in development spending. Pakistan allocated 2.1 trillion Pakistani rupees ($7.45 billion) for defense in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defense budget. India's defense spending in its 2025–26 (April-March) fiscal year was set at $78.7 billion, a 9.5 percent increase from the previous year, including pensions and $21 billion earmarked for equipment. It has indicated it will step up expenditure following the May conflict with Pakistan. The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2 percent economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7 percent, against an initial target of 3.6 percent set in the budget last year. Pakistan's growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8 percent and 6.0 percent growth is expected in 2025, according to the Asian Development Bank. RATE CUTS NOT ENOUGH Expansion of the economy should be aided by a sharp drop in the cost of borrowing, the government says, after a succession of interest rate cuts by the central bank. But economists warn that monetary policy alone may not be enough, with fiscal constraints and IMF-mandated reforms still weighing on investment. Finance Minister Muhammad Aurangzeb said on Monday that he wanted to avoid Pakistan's boom and bust cycles of the past. 'The macroeconomic stability that we have achieved, we want to absolutely stay the course,' he said. 'This time around we are very, very clear that we do not want to squander the opportunity.' The budget is expected to prioritize expanding the tax base, enforcing agriculture income tax laws, and reducing government subsidies to industry, to meet the terms of a $7 billion IMF bailout signed last summer. Just 1.3 percent of the population paid income tax in 2024, according to the tax authorities, with agriculture and the retail sector largely outside of the tax net. The IMF has urged Pakistan to widen the tax base through reforms which include taxing agriculture, retail, and real estate. Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that he expected the revenue target for 2025-26 will be missed. 'The shortfall will mostly be owing to lack of optimal implementation of announced measures as well as absence of meaningful structural reforms to widen the tax net in general,' said Mobeen. ($1 = 281.8400 Pakistani rupees)
Arab News
2 hours ago
- Arab News
Pakistan to unveil national budget today as it eyes sustainable growth
ISLAMABAD: Pakistan's coalition government will unveil the national federal budget today, Tuesday, for the fiscal year till June 2026 with Islamabad eyeing sustainable economic growth and vowing to continue ahead with painful fiscal reforms to ensure that. The budget comes a day after the government unveiled the annual Economic Survey, a pre-budget document assessing the economy's trajectory over the past year, which said Pakistan's economy is expected to grow 2.7 percent in the outgoing fiscal year, missing Islamabad's 3.7 percent target. The budget every year highlights the government's plans to raise revenue, outlines its expenditures, states inflation and growth assumptions as well as allocations for several areas such as defense, education, health and other sectors of the economy. 'The Federal Budget for the next fiscal year will be presented in the National Assembly on Tuesday,' state broadcaster Radio Pakistan reported, adding that the lower house of parliament will meet at 5:00 p.m. for the session. 'Finance Minister Muhammad Aurangzeb will present the Federal Budget in the National Assembly and later he will lay a copy of the Finance Bill, 2025, containing the Annual Budget Statement before the Senate.' The budget comes as Pakistan undertakes efforts to navigate a tricky path to economic recovery. The South Asian country, which came to the brink of a sovereign default in June 2023, has since then undertaken painful macroeconomic reforms that it credits for gains such as a low inflation rate, increasing investors' confidence in the stock market and current account surpluses. Pakistan has vowed to stay the course of long-term reforms, which include widening the tax net, taking steps to privatize loss-making state-owned assets, slashing subsidies and undertaking reforms in energy and other vital sectors. An International Monetary Fund (IMF) team concluded its visit to Pakistan last month after discussions with authorities regarding the budget, broader economic policy and reforms under its ongoing $7 billion loan program for the country. The IMF last month approved the first review of Pakistan's loan program, unlocking a $1 billion payment. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. The IMF's loan is vital for Pakistan which is trying to revive its debt-ridden economy. In a televised news briefing on Monday afternoon while releasing the Economic Survey, Aurangzeb reaffirmed the government's commitment to implementing IMF-backed structural reforms to transform the fundamentals of Pakistan's economy. 'The DNA of Pakistan's economy has to be fundamentally changed through tax and energy reforms that have started showing remarkable results,' he said. According to the survey, Pakistan's revenues rose sharply over the past year. It said tax collections increased by 26.3 percent to Rs9.3 trillion ($32.9 billion), while total revenues stood at Rs13.4 trillion ($47.5 billion). The primary surplus also improved to 3.0 percent from 1.5 percent. Government expenditure during this period rose to Rs16.3 trillion ($58 billion), with current and development spending increasing by 18.3 percent and 33 percent, respectively. On the external front, Pakistan recorded a sharp turnaround in its current account, moving from a $1.3 billion deficit to a $1.9 billion surplus, driven by improved exports and record remittance inflows.
Arab News
19 hours ago
- Arab News
How Gulf ties became key focus of India's foreign policy over past decade
Ties with Gulf countries have become a key focus of India's foreign policy over the past 10 years, the latest report by the Council for Strategic and Defence Research shows, highlighting New Delhi's special focus on Saudi Arabia and the UAE. Headquartered in the Indian capital, the CSDR is a think tank specializing in research on geopolitics, foreign policy, and military strategy. Its report published last month, 'From Trees to Forests: The Evolution of India-Middle East Ties post 2014,' highlights India's investment in bilateral relations with Gulf Cooperation Council countries, which are independent of larger global frameworks. The effort to strengthen the connection started before Prime Minister Narendra Modi took office in 2014, but it has gained momentum with his frequent visits to the six-member bloc comprising Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Oman. 'In the last 10 years, India has substantiated this effort by filling crucial gaps in political, economic, and military contact with key states, with a special focus on Saudi Arabia and the UAE,' Bashir Ali Abbas, senior research associate at CSDR and the report's author, told Arab News. 'In the last 10 years, the Middle East has also emerged as a strategic space for India, with new defense relationships, and economic visions which also fit with the Gulf's own focus on economic diversification.' While India's relations with the Gulf region span centuries, it currently has the largest concentration of the Indian diaspora — about 9.7 million people. 'And India's top oil suppliers at any point in time inevitably are at least three Gulf states. This alone necessitates that India pay close attention to the region,' Abbas said. 'In India, policy makers and official decision-making institutions have updated their understanding of the region, but more importantly its changing nature. This evolved understanding has enabled the rise of new strategic partnerships, and PM Narendra Modi is the only Indian PM to have officially visited all six states of the Gulf Cooperation Council.' By 2018, the GCC became India's largest regional trading bloc, with an annual trade value of $104 billion in FY2017-2018. The volume that year surpassed India-ASEAN trade of $81 billion, and India-EU trade — $102 billion. Currently, it is even higher, with the Indian government estimating it at $162 billion in FY2023-24. In 2019, India became only the fourth state to establish a Strategic Partnership Council with Saudi Arabia, following Crown Prince Mohammed bin Salman's visit to New Delhi. During the Kingdom's presidency of the Group of 20 largest economies in 2020, the two countries started to forge partnerships and bilateral programs that saw further development as India took the G20 presidency in 2023. Over the past four years, the countries have since also engaged in a series of bilateral navy, air force and army exercises. 'Today, India sees Saudi Arabia as a strategic partner, with political and economic ties robust enough to also substantial cooperation in defense and security,' Abbas said. 'Given both India's own Viksit Bharat 2047 development vision and (the crown prince's) Vision 2030, India and Saudi Arabia are now driven by shared economic and strategic goals.' With the UAE, India signed a Comprehensive Economic Partnership Agreement in 2022, following which their bilateral trade grew to $85 billion in just over a year. The number of multi-sectoral memoranda of understanding between Indian and Emirati public and private entities has since reached over 80, according to the CSDR report. 'India also sought to reframe other bilateral relationships where fresh opportunities had arisen,' it said, adding that New Delhi was 'closing the Gulf circle,' with strategic partnerships signed with Kuwait during Modi's visit in 2024, and with Qatar during Sheikh Tamim bin Hamad Al-Thani's state trip to New Delhi in early 2025. The relations 'will certainly see a positive trajectory in the near and distant future — especially if it is backed up by greater avenues of intellectual contact,' Abbas said. 'Greater intellectual contact and an evolved popular understanding will enhance the strategic relationships between India and its Arab partners, through the injection of more ideas, perspectives, and actors who can work as champions for closer ties.'
