Attacks on Gulf energy infrastructure 'worrying' for outlook: finance minister

Pakistan's Finance Minister Muhammad Aurangzeb expressed concern on Saturday that attacks on energy infrastructure in Saudi Arabia and other Gulf countries pose a risk to the nation's economic outlook after the US-Israeli war on Iran. In an interview at the IMF-World Bank Annual Meetings in Bangkok, Aurangzeb stated that Pakistan had managed to avoid energy shortages and maintain stability despite the global price surge.

He noted that the country had sufficient energy supplies through November and was now preparing for the winter months. However, Aurangzeb warned that ongoing attacks on energy facilities could delay economic recovery even if tensions ease. He emphasized that unless the government felt an "absolute dire need," it would not procure spot cargoes of liquefied natural gas, which are typically more expensive than contracted shipments.

The escalation in attacks on Saudi infrastructure, including energy sites and airports, has been attributed to Yemen's civil war and the Houthis' retaliation against Saudi allies. Aurangzeb attributed the country's ability to weather the initial shock to a previous fiscal consolidation path and growing tax revenues. However, he acknowledged ongoing challenges in tax collection and reform efforts, facing resistance from industry and vested interests.

Pakistan is currently in its 25th IMF programme, including multiple bailouts, and is working on fiscal consolidation to avoid a potential crisis.