Islamabad, Pakistan: Finance Minister Muhammad Aurangzeb said the Pakistan budget outlook could improve after the US-Iran deal, but a revision remains premature.
Aurangzeb told Reuters that damaged energy infrastructure would delay the normalisation of supply chains. He said the conflict had pushed inflation back into double digits.
“I do see upsides in what we have projected for next year,” Aurangzeb said. However, he added that it was “way too premature” to revise the budget.
Pakistan’s FY2026-27 budget targets 4% growth and 8.2% inflation, according to the budget presented in parliament. It also raises defence spending 18% to Rs3 trillion, or $10.8 billion.
The budget relies on higher tax revenue to keep Pakistan’s $7 billion International Monetary Fund programme on track.
Aurangzeb said Pakistan may use commercial borrowing in fiscal year 2027 to change its creditor profile without increasing overall external debt.
He said the government wanted to replace some bilateral borrowing with commercial debt. Pakistan repaid $3.4 billion in bilateral deposits with the UAE last month.
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Pakistan plans further Panda Bond, Eurobond, US dollar and first rupee-linked, dollar-settled issues. Aurangzeb said the sizes had not yet been decided.
The finance minister said defence-export gains were too early to quantify. He also said Pakistan would regulate crypto, tokenisation and digital-asset exchanges before taxing the sector.
