Islamabad, June 17, 2025: Amid escalating tensions in the Middle East, Pakistan’s Finance Minister Muhammad Aurangzeb said on Tuesday that the country is prepared to manage any economic fallout that may arise due to instability in the region.
Speaking at a workshop organized by the Securities and Exchange Commission of Pakistan (SECP) on pension reforms at a local hotel in Islamabad, Aurangzeb noted that the government held a detailed meeting on Monday with key stakeholders to assess the situation and chart out a responsive strategy.
“We have assessed our reserves, closely monitored asset pricing, and made contingency plans in case the regional conflict deepens,” the minister said. “At the moment, we are confident in our ability to deal with any shocks. Of course, we hope the situation de-escalates.”
Recent flare-ups between Iran and Israel have raised fears of a broader conflict that could disrupt oil supplies and trigger economic ripples far beyond the Middle East. In anticipation of such a scenario, Prime Minister Shehbaz Sharif has formed a high-level committee tasked with monitoring fuel prices and supply trends.
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Turning to trade matters, Aurangzeb said that talks with Washington over tariff relief were progressing in a positive direction.
He met with Howard Lutnick, the US Secretary of Commerce, in Islamabad on Monday.
“It was a productive conversation. Both sides understand the importance of creating a level playing field,” he said, emphasizing that Pakistan aims to position itself competitively in global trade. “The broader relationship with the US remains on a strategic path, and this dialogue is a step in the right direction.”
The development comes after the Trump administration in April reimposed sweeping tariffs on several countries, including Pakistan. Islamabad is now seeking an exemption from the 29 percent reciprocal duties, which were introduced as part of that broader policy.
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On domestic reforms, Aurangzeb reaffirmed the government’s commitment to staying the course on key economic restructuring, particularly in the energy, tax, and state-owned enterprise sectors.
“This time, we’ve taken tangible steps. We’re restructuring tariff mechanisms to foster competition, reduce protectionist barriers, and push our export sector forward,” he noted.
The finance minister also pointed to the burden of rising pension liabilities, revealing that annual pension payouts have now surpassed one trillion rupees, exceeding the federal government’s development budget.
