Pakistan finance minister: conflict with India won't have large fiscal impact
By Ariba Shahid and Charlotte Greenfield
KARACHI/ISLAMABAD (Reuters) -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, Pakistan's Finance Minister said in an interview with Reuters on Monday.
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, Finance Minister Muhammad Aurangzeb said in the online interview.
On Monday, U.S. President Donald Trump said the U.S. is ready to help India and Pakistan after a ceasefire agreement, claiming trade was a big reason they "stopped fighting".
Pakistan faces a 29% 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.
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".
When questioned about potential increased military spending in the upcoming budget, Aurangzeb deferred comment, saying it was premature to discuss specific plans. However, he said: "Whatever we need to do in terms of ensuring that our defence requirements are met will be met."
Aurangzeb said he expects the Indus Water 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."
Tensions between India and Pakistan began mounting after the April 22 attack in Indian Kashmir on Hindu tourists that killed 26 people, sparking the worst clashes between the nuclear-armed neighbours in more than two decades.
On Saturday a ceasefire in the Himalayan region was announced by Trump, following four days of fighting and diplomacy and pressure from Washington.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
39 minutes ago
- Newsweek
Russia Won't End Ukraine War Until NATO 'Pulls Out' of Baltics: Moscow
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Ukraine war won't end until NATO withdraws troops from the Baltics, a top Russian official has warned. Sergei Ryabkov, Russia's deputy foreign minister responsible for U.S. relations, nonproliferation and arms control, made the remarks in an interview with state-run news agency Tass. Newsweek has reached out to the Kremlin and NATO for comment by email. Why It Matters Ryabkov's comments mark a shift in the Kremlin's position. He suggested that the conflict's roots lie not only in Ukraine itself but in NATO's eastward expansion. According to Ryabkov, the withdrawal of NATO forces from the Baltics would help bring an end to the war. What To Know NATO maintains a strong military presence in the Baltic States, with multinational battle groups and brigades stationed in Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. The military alliance bolstered its presence in the region in the wake of Russia's full-scale invasion of Ukraine. It said in an update on June 6 that the eight battle groups "demonstrate the strength of the trans-Atlantic bond and the Alliance's solidarity, determination and ability to respond to any aggression." Also, Sweden and Finland have switched from being neutral to joining NATO since the invasion. The Kremlin had said Ukraine must abandon its ambitions to join NATO as a condition for ending the war, but Ryabkov appeared to signal to Tass that the alliance must withdraw completely from the Baltics as well. In the article titled "Deputy Foreign Minister Ryabkov: It is impossible to resolve the conflict until NATO pulls out," the official argued that resolving the conflict in Ukraine requires addressing what he described as the root causes. "The American side requires practical steps aimed at eliminating the root causes of the fundamental contradictions between us in the area of security. "Among these causes, NATO expansion is in the foreground. Without resolving this fundamental and most acute problem for us, it is simply impossible to resolve the current conflict in the Euro-Atlantic region." Ryabkov suggested NATO's eastward expansion was central to the war. "Given the nature and genesis of the Ukrainian crisis, provoked by the previous U.S. authorities and the West as a whole, this conflict naturally acts, well, if you like, as a test, a trial, which checks the seriousness of Washington's intentions to straighten out our relations," he said. Last month, three Russian sources with knowledge of Washington-led negotiations told Reuters that Putin's conditions for ending the Ukraine war include a written pledge from Western leaders to halt NATO's eastward expansion. What People Are Saying A senior Russian source with knowledge of top-level Kremlin thinking told Reuters in an article published on May 28: "Putin is ready to make peace but not at any price." A second source told Reuters: "Putin has toughened his position." Sergei Ryabkov, Russia's deputy foreign minister, told Tass: "Trump's return to the White House, declaring his commitment to a political and diplomatic settlement of the Ukrainian crisis, has become a reason for cautious optimism in terms of a potential normalization of relations with the United States, but also in a broader sense. "It was in this vein that the presidents of Russia and the United States held four telephone conversations. Our side expressed gratitude for the United States' support in resuming direct negotiations between Russia and Ukraine, interrupted by the Ukrainian side in 2022. "But Vladimir Vladimirovich Putin also confirmed the basic principle of the need to eliminate the root causes of the conflict within the framework of political and diplomatic efforts. Otherwise, long-term peace cannot be ensured, and in concrete terms, it is necessary to exclude any opportunity for the Ukrainian Armed Forces to take advantage of the pause for a respite and regroup their forces." What Happens Next Moscow and Kyiv will continue to launch strikes on each other's territory, with the war in Ukraine showing few signs of a peace deal in the near future.
Yahoo
42 minutes ago
- Yahoo
Tesla Seems Terrified These Messages About Its Robotaxi Rollout Will Be Released
We're less than a week away from Tesla's launch of a robotaxi service in Austin, Texas. The company's long-awaited ride-hailing service is set to kick off on June 12, albeit with some significant limitations. A mere "ten or 20 vehicles," which will rely on human safety drivers, will ferry passengers on "day one," CEO Elon Musk revealed during the company's disastrous earnings call in April. Tellingly, the carmaker is already desperately trying to steer the conversation, closely barring the public from accessing information about the robotaxi service pilot. As Reuters reports, Tesla is trying to prevent the city from releasing public records related to the project, raising urgent questions surrounding Tesla's long-awaited foray into the autonomous ride-hailing space. As Tesla reels from Musk's incredibly damaging leadership — or lack thereof — the stakes are incredibly high. Making matters even worse, the company's shares tanked on Thursday, following the mercurial CEO's ugly spat with the president breaking out into the public, wiping out a record $152 billion in market value. Vehicle sales have also fallen off a cliff, compounding a growing crisis. In other words, an extraordinary amount is riding on Tesla's Hail Mary robotaxi launch. To learn more, Reuters requested communications records between Tesla and Austin officials spanning the last two years. But as one public information officer from the city told the agency, "third parties" intervened, preventing them from releasing these cords to protect their "privacy or property interests." A Tesla lawyer told Reuters that the EV maker was simply protecting "confidential, proprietary, competitively sensitive commercial, and/or trade secret information" and that releasing these records would "irreparably harm Tesla." That degree of secrecy is certainly suspicious. Apart from protecting its IP, it feels plausible that Tesla is trying to prevent the public from exposing the EV maker's foray into the autonomous ride-hailing industry as half-baked and woefully behind the competition. Literal insiders certainly seem to feel that way. In a podcast interview last month, Tesla's head of Autopilot and AI software, Ashok Elluswamy, admitted that "technically Waymo is already performing." "We are lagging by maybe a couple of years," he added. Musk has bet the company's entire fate on a future in which "hundreds of thousands, if not over a million, Teslas" are "doing self-driving in the US" in a matter of years. But glaring shortcomings with the firm's driver assistance software remain. Federal regulators are still investigating fatal crashes involving the carmaker's misleadingly-named "Full Self-Driving" feature, casting its future as a fully autonomous taxi company in doubt. Unperturbed, Musk has remained characteristically optimistic, tweeting late last month that "Tesla has been testing self-driving Model Y cars (no one in driver's seat) on Austin public streets with no incidents." "A month ahead of schedule," he added. "Next month, first self-delivery from factory to customer." More on the robotaxi launch: Tesla's Robotaxi Launch Is Already an Enormous Mess
Yahoo
43 minutes ago
- Yahoo
Italy and Israeli Paragon part ways after spyware affair
By Giuseppe Fonte and Alvise Armellini ROME (Reuters) -Italy and Israeli spyware maker Paragon said they have ended contracts following allegations that the Italian government used the company's technology to hack the phones of critics, according to a parliamentary report on Monday and the company. Both sides said they had severed ties, giving conflicting accounts that triggered widespread criticism from opposition parties in Italy, while the journalists' federation FNSI called on prosecutors to investigate to ascertain the facts. An official with Meta's WhatsApp chat service said in January that the spyware had targeted scores of users, including, in Italy, a journalist and members of the Mediterranea migrant sea rescue charity critical of Prime Minister Giorgia Meloni. The government said in February that seven Italian mobile phone users had been targeted by the spyware. At that time the government denied any involvement in illicit activities and said it had asked the National Cybersecurity Agency to look into the affair. A report from the parliamentary committee on security, COPASIR, said on Monday that Italian intelligence services had initially put on hold and then ended their contract with Paragon following a media outcry. It was unclear when the contract was ended. However, COPASIR recalled that, addressing parliament on February 12, the government had said that it was still in place. The committee also added it found no evidence that Francesco Cancellato, a reported target and editor of investigative website Fanpage, had been put under surveillance using Paragon's spyware, as he had alleged to Reuters and other media outlets. In a statement quoted by Fanpage, Paragon said it stopped providing spyware to Italy when Cancellato's alleged involvement became public, and said the government declined an offer to jointly investigate whether and how he was spied upon. The company did not reply to requests for comment from Reuters. Opposition politicians called on the government to clarify the matter in parliament. Meloni's office declined to comment. The COPASIR report said Italy's domestic and foreign intelligence agencies activated contracts with Paragon in 2023 and 2024 respectively and used it on a very limited number of people, with permission from a prosecutor. The foreign intelligence agency used the spyware to search for fugitives, counter illegal immigration, alleged terrorism, organised crime, fuel smuggling and counter-espionage and internal security activities, COPASIR said. It added that members of the Mediterranea charity were spied on "not as human rights activists, but in reference to their activities potentially related to irregular immigration", with permission from the government. Undersecretary Alfredo Mantovano, Meloni's point man on intelligence matters, authorised the use of Paragon spyware on Mediterranea activists Luca Casarini and Beppe Caccia on September 5, 2024, the report said. Mantovano was not immediately available for comment. A Sicilian judge last month ordered six members of Mediterranea, including Casarini and Caccia, to stand trial on accusations of aiding illegal immigration, the first time crew members of a rescue vessel have faced such prosecution. All have denied wrongdoing.
