ISLAMABAD: Pakistan could improve economic projections for 2027 after the end of the US war on Iran, but it is still too early to revise the budget, Finance Minister Muhammad Aurangzeb told Reuters, hours after the US and Iran signed a deal to end the fighting.

Damaged energy infrastructure meant supply chains would take time to return to normal, after the conflict pushed inflation back into double digits, Aurangzeb said.

“We were looking at how we manage the second, third-order impact in case this conflict continues,” he said. “The energy infrastructure has been hit. And therefore, it will take time before we return to normalcy in terms of supply chains.”

He added: “I do see upsides in what we have projected for next year,” but cautioned it would be “way too premature” to revise the budget.

Pakistan’s FY2026-27 budget, presented in parliament on Friday, targets growth of 4% and inflation of 8.2%.

It raised defence spending 18% to Rs3 trillion ($10.8 billion), while relying on higher tax revenue to keep a $7-billion IMF programme on track.

Commercial borrowing to change creditor profile

The government may use commercial borrowing in fiscal year 2027 to change its creditor profile without increasing overall external debt, Aurangzeb added in comments on Monday.