Inflation likely to ease as Middle East tensions subside: Finance Minister Aurangzeb
Why this matters: local context for readers following news across Pakistan and the region.
ISLAMABAD – Federal Minister for Finance Senator Muhammad Aurangzeb on Saturday said that inflation in the country is expected to decline once tensions in the Middle East ease, linking recent price pressures to global geopolitical instability. Presenting the federal budget in the National Assembly, the finance minister said that despite ongoing regional uncertainty, including the Iran–US conflict, Pakistan’s average inflation rate for the current fiscal year is projected to remain around 7 percent. This figure is slightly lower than the official estimate of 7.5 percent set earlier for the year. He acknowledged that inflation had shown an upward trend in recent months, but attributed the increase primarily to external factors, particularly unrest and instability in the Middle East. According to him, global energy markets and supply chains have been impacted by the situation, indirectly affecting domestic price levels in Pakistan. “The recent rise in inflation is largely driven by developments in the Middle East,” Aurangzeb said while addressing lawmakers, adding that external shocks continue to play a significant role in shaping Pakistan’s economic indicators. He expressed optimism that the inflationary pressure would ease once the geopolitical situation stabilizes. “As soon as the clouds of conflict in the Middle East clear, inflation will also begin to come down,” he remarked. The minister’s comments come at a time when Pakistan is grappling with broader economic challenges, including currency pressure, fiscal constraints, and reliance on external financing. However, he maintained that macroeconomic indicators are showing signs of gradual stability compared to previous years. Aurangzeb also reiterated the government’s focus on maintaining fiscal discipline and steering the economy toward sustainable growth, emphasizing that external stability will remain a key factor influencing domestic economic performance. Economic analysts note that Pakistan’s inflation o