Attacks on Gulf energy infrastructure pose risks to Pakistan's economic outlook: FinMin Aurangzeb

Finance Minister Muhammad Aurangzeb on Saturday told AFP the country had so far withstood the shock from skyrocketing energy prices due to the Iran war, but that attacks on infrastructure in Saudi Arabia and other Gulf countries were "worrying" for the country's longer-term economic outlook.

In an interview on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Aurangzeb said Pakistan had procured enough energy supplies to last through November, and was now planning for the winter months, when household needs typically spike.

"The first-order impact has been negotiated well by Pakistan," he said.

"We've had no shortage, no queues at the gas stations, and no law and order situation, which at times we have seen in some of the countries."

He added that unless the government saw "an absolute dire need", it would not be procuring spot cargoes on the LNG front, which tend to be far more expensive than previously contracted shipments.

Since the United States and ally Israel launched the war on Iran in February, global energy prices have surged as Tehran's retaliatory action has targeted Washington's Gulf allies and curtailed oil and gas supplies.

With Yemen's civil war flaring back to life as well, the Houthis there have repeatedly attacked Saudi infrastructure, including energy facilities and airports, in recent days.

Aurangzeb expressed alarm at the escalation, saying damage to such sites would delay a return to economic normalcy.

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"What is now (the) worrying part of it is when the energy infrastructure starts getting hit," he said.

"I, to be very honest, I don't know where that would go. But one thing is very clear: that if the infrastructure continues to get hit, the return to normalcy, even if things subside, will take longer."

"Fortunately for us, we have been on this fiscal consolidation path for a while," Aurangzeb said with a rueful smile.

The country's tax revenues have grown significantly in recent years, and the finance minister said the government was targeting the theft of taxes by private sector businesses that collected sales tax from consumers but never deposited it in government accounts.

Such theft accounted for billions of dollars, Aurangzeb said, adding that there remained "room for improvement" on increasing income tax collection as well.

He said the government's reform agenda had faced resistance from industry, lobbying groups and vested interests.

"Every reform, everything that you try to do when you try to change the status quo, there is pushback," he said.

The finance minister also met Jihad Azour, director of the IMF Middle East and Central Asia Department, to discuss Pakistan’s economic performance and reforms, the Ministry of Finance said on Saturday.

According to the post on X, both sides reviewed progress on revenue, inflation, growth and the current account, noting Pakistan’s resilience despite regional conflict.

He made the remarks during a meeting with the delegation of Ajman Bank in Bangkok, Thailand.

"They also outlined energy procurement and winter preparedness measures, alongside adequate fertiliser supplies to safeguard food security," the ministry added.

It further added that the discussions covered stronger reserves, reduced forward foreign exchange liabilities, longer debt maturities and lower external repayment requirements.

Aurangzeb reaffirmed the government’s commitment to sustaining primary surpluses, reducing public debt and advancing growth-friendly tax reforms while protecting social spending.

Both sides also discussed privatisation, greater private-sector participation and export-oriented growth to strengthen economic resilience and creditworthiness.

The ministry said the discussions underscored the importance of maintaining reform momentum, political commitment and effective communication, while highlighting the link between economic stability and national security.

With additional input from Web Desk.