ISLAMABAD: Pakistan’s finance ministry said on Tuesday the recent four-day standoff with India will not have a significant fiscal impact, as analysts estimated that the conflict cost both countries losses of around $1 billion per hour.

Tensions between India and Pakistan escalated after a deadly April 22 attack on Hindu tourists in Indian-administered Kashmir, which killed 26 people. India blamed Pakistan for the assault, an allegation denied by officials in Islamabad, though it still led to one the worst military confronts between the two nuclear-armed neighbors in decades.

A ceasefire was announced on Saturday by US President Donald Trump, following four days of fighting and intense diplomatic efforts led by Washington. However, the military confrontation, by then, had disrupted stock markets, led to airspace closures, escalated defense spending and caused economic losses amounting to billions of dollars.

“The current standoff with India won’t have a large fiscal impact on Pakistan,” Khurram Schehzad, adviser to the finance minister, told Arab News.

“It can be managed within the current fiscal space, with no need for a new economic assessment,” he added.

Schehzad said Pakistan’s economic resilience was evident from a new record at the Pakistan Stock Exchange, which on Monday posted the highest single-day gain in over 26 years, surging by 10,123 points or 9.45 percent, significantly surpassing the losses recorded last week following the Indian strike.

“Pakistan’s measured and responsible response, in both its narrative and actions on the ground, has caught investors’ eye, alongside the potential positive spillover effect of a possible settlement in the US-China tariff issue,” he added.

Arab News reached out to the defense ministry and Pakistan’s military media wing for official estimates of the conflict’s cost, but did not receive a response by the time of filing this story.

Meanwhile, economists said the recent military standoff inflicted heavy financial losses on both countries, with combined costs approaching $1 billion per hour.

“The recent conflict, over an 87-hour period, I think cost about a billion dollars an hour for both countries,” economist Farrukh Saleem told Arab News.

He estimated total combined losses of between $80 and $90 billion over the four-day period.

“About 20 percent of that was incurred by Pakistan and a good 80 to 85 percent by India,” he added.

Saleem said daily economic losses from the conflict, including stock market declines and other impacts, amounted to around $20 billion per day, with Pakistan losing up to $4 billion and India as much as $16 billion per day.

“I have tried to put things together. If this conflict had continued for 30 days, my estimate is that both countries would have lost a good $500 billion, with over a $400 billion loss for the Indian economy,” he added.

Explaining India’s higher losses, he noted that each Rafale fighter jet costs around $240 million, while Pakistan’s JF-17 Thunder or J-10C jets are priced between $20 and $25 million per unit.

“BrahMos, for instance, the Indian ballistic missile, costs $3 million apiece. If, for example, 10 units are used in a day, that amounts to $30 million in a single day,” he said.

Dr. Ali Salman, Executive Director of the Policy Research Institute of Market Economy (PRIME), an Islamabad-based independent economic policy think tank, said the conflict had disrupted economic sentiment and affected investor confidence.

“Certainly, investors would not like to come into countries, whether India or Pakistan, if they are in a constant war-like situation,” he told Arab News.

He emphasized that prolonged conflict would push people in both countries deeper into poverty, noting that one in four poor people in the world lives in India or Pakistan.

“We have 27 percent of the world’s poor in just these two countries, and I believe that we need to come out of the military context and go into an economic context,” he added.

Another economist, Shakeel Ramay, said every war has an economic dimension and that the conflict had imposed a heavy financial burden on both economies.

“Pakistan’s military expenditure over the four-day conflict, including jets, artillery and missiles, amounted to around $1.5 billion from the national budget, by my estimate,” he said, adding that this was significant, especially as the country continues to face economic challenges.

“The good thing is our economic activities continued without interruption, retail markets operated smoothly with no shortages and trade routes remained open, all indicating that the direct economic cost was minimal,” he added.

ISLAMABAD: Pakistan’s Information Minister Ataullah Tarar has said that Islamabad will not let India stop its share of water under the Indus Waters Treaty (IWT) and expressed hope that US President Donald Trump will resolve the Kashmir issue between the neighbors, following a ceasefire between them after last week’s military conflict.

India and Pakistan last week attacked each other with fighter jets, missiles and artillery fire, in worst fighting between them in more than two decades that has killed more than 70 people on both sides.

The fighting, which came to an end on Saturday after the US brokered a ceasefire, had erupted amid heightened tensions between the neighbors over an attack in Indian-administered Kashmir on April 22 that India blamed on Pakistan. Islamabad denies involvement.

In an interview with Britain’s Sky News channel, Tarar said since things were moving forward after the ceasefire between the two nations, Pakistan was looking forward to the resolution of its concerns, including India’s suspension of the IWT.
“India has not stopped the water yet and they don’t have the capacity to stop that water,” he said on Monday. “We obviously won’t let India deny the right of water to our people.”

India announced suspending the 1960 World Bank-brokered treaty, which ensures water for 80 percent of Pakistani farms, a day after the April 22 attack in Pahalgam that killed 26 tourists.

The IWT grants Pakistan rights to the western rivers — Indus, Jhelum, and Chenab — for irrigation, drinking, and non-consumptive uses like hydropower, while India controls the eastern rivers — Ravi, Beas, and Sutlej — for unrestricted use but must not significantly alter their flow. India can use the western rivers for limited purposes such as power generation and irrigation, without storing or diverting large volumes, according to the agreement.

Last week, India’s Foreign Secretary Vikram Misri said the treaty would remain in abeyance, signaling deeper diplomatic rifts between the two nations as they traded fire across several cities.

“The fact is that there have been fundamental changes in the circumstances in which the Indus Waters Treaty was concluded,” Indian Foreign Secretary Misri was quoted as saying by NDTV on Thursday.

He said there is now a need to “reassess the obligations under that treaty.”

But Tarar believed Pakistan’s case on the agreement was “very strong,” adding they would wait to see how things unfold.

“At this point in time, the water is flowing normally and there is no stoppage,” he told Sky News.

Pakistan and India have a history of bitter relations and frequently accuse each other of fomenting militancy in the other’s territory.

Kashmir, which has been divided between Pakistan and India since their independence from Britain in 1947, has been a flashpoint for decades, with the neighbors having fought two of their three wars over the region. Last week’s military conflict also originated from tensions over an assault in the disputed region.

Asked about details of the ceasefire, Tarar said many countries had been speaking to both Pakistan and India, and President Trump had been “pivotal” in securing the truce.

He hoped the US president would also help bring together the two nuclear-armed neighbors to resolve the enduring conflict in Kashmir.

Trump “has made things abundantly clear because he wants a resolution to major issues between us, between India and Pakistan,” Tarar said.

“And he has specifically mentioned Kashmir that he would like to settle.”

On Sunday, Trump said he would try to work with both India and Pakistan to see if they can resolve their dispute over Kashmir.

“I will work with you both to see if, after a ‘thousand years,’ a solution can be arrived at concerning Kashmir,” Trump wrote on his social media platform, Truth Social, referring to India and Pakistan.

But India has for years insisted Kashmir is a bilateral issue and not allowed any third-party mediation.

In his first address to the nation since last week’s conflict, Prime Minister Narendra Modi made clear that militancy was the only issue he wanted to discuss with Pakistan.

“I will tell the global community also, if we talk to Pakistan, it will be about terrorism only,” Modi said on Monday.