AGP Executive Report

IMF Deal: Pakistan reached a staff-level agreement for about $1.2 billion in funding, including climate financing, offering support as the country pursues economic reforms. Household Costs: Weekly inflation rose 0.57%, while petrol edged down 66 paise and diesel rose 52 paise per litre. The government says its fuel subsidy will continue, even as IMF pressure to end broad subsidies puts the scheme in focus. Energy Market: Nepra set grid-use charges of Rs6.23 to Rs19.62 per unit for bulk consumers joining the competitive power market, on top of their supply costs. Trade and Industry: AGTL shipped its first tractors to Uzbekistan and signed a partnership to expand there; textile and retail groups also joined forces to grow local brands and exports. External Flows: September remittances totalled $3.6 billion, while foreign reserves were reported at $26.8 billion.**

IMF Deal: Pakistan reached a staff-level agreement that could unlock about $1.21 billion in funding, as the Fund presses for an end to broad fuel subsidies. Remittances: Overseas workers sent $3.6 billion in September, up 12.7% from a year earlier; inflows for the first quarter of FY27 rose to $10.9 billion. Export Links: A weekly Karachi-Europe shipping service has resumed, connecting exporters to seven ports and easing reliance on transshipment. Pakistan and Bahrain are also targeting $1 billion in bilateral trade within three years. Energy Costs: The government plans to replace broad gas and electricity subsidy slabs with targeted support for low-income households from 2027, while PSO signed a petroleum supply agreement with Oman’s OQ Trading. Business Finance: The ECC cleared lending measures for small firms and farmers as the government pursues a Rs2 trillion SME financing target. Markets: The KSE-100 slipped 352 points to 167,089 in subdued Friday trading.

IMF Deal: Pakistan reached a staff-level agreement that could unlock about $1.21 billion, subject to IMF board approval. The package includes roughly $1 billion under the main lending programme and $210 million for climate measures. Trade and Investment: Pakistan and Bahrain agreed to fast-track a Pakistan-GCC free-trade agreement and set up working groups on trade, investment and energy. Sindh plans an investment conference in Shanghai on October 15 to attract Chinese projects. Business Financing: The ECC approved a framework to widen lending support for small firms and farmers, alongside funding for several public-sector needs. Prices and Reserves: Wholesale inflation rose 13.3% year-on-year, while September consumer inflation was 10.3%. Petrol prices increased by Rs2.31 per litre. Foreign reserves totalled $26.8 billion on October 2, including $21.45 billion held by the State Bank. Ports: Karachi’s upgraded cargo terminal can handle ships carrying up to 120,000 tonnes; its chief executive says the change could save traders more than $150 million a year in freight costs.

IMF Deal: Pakistan has reached a staff-level agreement for about $1.21 billion in IMF financing, subject to Executive Board approval. The Fund urged an end to broad fuel subsidies, saying any support should be targeted, temporary and limited to those most in need. Energy Costs: Brent crude climbed above $104 a barrel, helping push the KSE-100 down 1,138 points. Consumers will also face a Rs1.11-per-unit electricity fuel adjustment in October bills; lifeline users are exempt. Gas Supplies: A Qatari LNG cargo is expected within three to five days, offering some relief as regional disruptions threaten energy supply. Trade Links: Pakistan and Bahrain set a target to raise bilateral trade to $1 billion within three years and agreed to establish a joint working group on trade and investment. Export Logistics: Direct MSC shipping service between Karachi and major European ports has resumed, easing transit delays and costs for exporters, particularly textile firms. Poverty: The World Bank says Pakistan accounts for 48% of people in the MENAAP region living on less than $3 a day.

IMF Financing: Pakistan reached a staff-level agreement that could unlock $1.21 billion, subject to IMF board approval, as higher energy costs and supply disruptions weigh on growth. Export Competitiveness: Business leaders urged the government to ensure reliable, affordable energy and clear tax refunds for exporters. First-quarter exports rose 10.84%, but faster import growth widened the trade deficit 15.13% to $10.79 billion. SME Finance: Lending to small businesses rose Rs23 billion to Rs1.137 trillion by September; the government aims for Rs2 trillion by June 2028 and plans a financing portal by November. Power Sector: The government is pursuing regulatory reforms to address changing demand, rapid solarisation and legacy capacity costs while encouraging private investment. Agriculture: Cotton output is projected at 6.7 million bales, well below the 9.64 million-bale target, raising concerns for a key export and rural sector. Financial Inclusion: Pakistan’s inclusion index improved to 59.5 in 2025, supported by wider use of digital payments and financial services.

Markets: The KSE-100 closed 120 points higher after volatile trading, as investors weighed hopes for an IMF deal against oil-price and political risks. IMF Talks: Negotiations are nearing completion, with a $1.2 billion tranche at stake; Pakistan and the Fund have yet to agree on the proposed auto policy. Household Relief: More than 9.5 million people have received subsidised petrol, as rising fuel costs squeeze household budgets. Digital Finance: SBP data show digital payments rose 65% in FY26, while digital channels accounted for 92% of retail payments. Investment: Telecom operator VEON raised its planned Pakistan investment to $1.5 billion, from $1 billion. Trade: Germany urged progress on GSP+ reforms and highlighted opportunities for investment in agriculture, food processing, technology and manufacturing.

IMF & Rupee Outlook: Pakistan and the IMF are nearing a staff-level agreement for the next tranche, with a reported $1.2bn disbursement seen as key for reserves and rupee support, while the programme continues to rely on tight fiscal and monetary discipline. Political Talks: President Zardari and PM Shehbaz agreed to keep consultations with the opposition, but Shehbaz told PTI to end its long march and sit-ins before dialogue—warning protests could hit exports and economic recovery. Khyber Pakhtunkhwa Tensions: Interior minister Talal Chaudhry said KP CM Sohail Afridi allegedly sabotaged talks at the final stage, while PTI-linked demands keep anti-terror consensus central to any next round. Energy & Water: Pakistan’s power shortfall crossed 4,000MW amid rising yields; IRSA approved a 22% Rabi shortage for Punjab and Sindh. Trade & Industry: CCP cleared Fatima Fertilizer’s acquisition of Agritech shares; TDAP launched Lahore’s International Exhibition of Handmade Carpets to boost exports; LCCI flagged trade deficit risks and regulatory pressure on plastics. Regional Business: Karachi and Gwadar ports discussed maritime cooperation; Punjab and Oman agreed to expand agriculture, fisheries, livestock and shrimp exports. Security/Deployment: Pakistan, Saudi Arabia and Türkiye moved to implement the Mecca defence pact with rapid deployment commitments, drawing domestic debate.

Power Crisis: Pakistan’s electricity shortfall has worsened, crossing 4,000MW, forcing DISCOs to extend load-shedding to 3–4 hours in many areas, with Lahore hit hard as demand outpaces supply. IMF Talks & Subsidies: The IMF has conditionally approved Pakistan’s fuel subsidy plan but wants it limited to smaller vehicles, while also pressing for sugar-sector deregulation and ending EV tax exemptions. Digital Payments: SBP data shows retail payments jumped 58% to 14.3 billion transactions in FY25-26, with digital channels handling over 92% of volumes, led by mobile-based solutions. Mobile Tariffs: PTA tariff data points to steep costs for higher-volume mobile data bundles, with some packages reaching Rs2,800/month and short validity periods. Politics & Markets: PM Shehbaz renewed dialogue with PTI, urging it to end the long march; PSX responded with a strong KSE-100 rebound on easing political concerns. Security & Fraud: FIA arrested an ex-MCB manager at Lahore airport in a Rs10m investment fraud case; NCCIA also busted an AI-based loan app blackmail network in Lahore, arresting 39. Energy Planning: PM ordered uninterrupted winter gas imports and a public awareness push for gas load management. Regional Diplomacy: UN chief Guterres praised Pakistan’s mediation role in US-Iran talks, citing Islamabad’s credibility in de-escalation. Corporate Moves: CCP cleared Fatima Fertilizer’s acquisition of Agritech shares, subject to competition review.

Export Finance: Pak EXIM and EDF have launched an export credit insurance risk-sharing pool for SME exporters, covering non-payment from commercial and political risks, with products set for launch on 1 Nov 2026. Livestock Exports: PM Shehbaz approved a plan to boost livestock exports via duty-free imports of high-yield breeds for specialised farms, plus corporate restructuring and a modern tagging system. Regional Trade & Diplomacy: Pakistan and Poland agreed to strengthen ties and expand business links, with PM Sharif seeking a long-term, multi-faceted partnership and backing for GSP+ cooperation. Middle East Security: Pakistan, Saudi Arabia and Türkiye activated practical collective defence under the Makkah Alliance, agreeing on rapid deployment of agreed forces amid Houthi attacks. Energy & Costs: Petrol rose 88 paisa to Rs393.64 while HSD fell Rs1.88; power shortfall remains a pressure point. Trade Balance: FPCCI warned the widening import bill is straining forex, with Q1 FY27 trade deficit up 15.13% to $10.792bn. Sector Updates: Seafood exports jumped 74.4% in Q1 FY27 to $125.4m; E&P firms’ profits seen up 44% YoY in 1QFY27. Business Ecosystem: LCCI pledged support to industrialists; PISMA elected Khalid Tawab unopposed; FPCCI set its 2027-28 election schedule. Governance & Compliance: FBR moves sales tax audits to a new faceless system and starts action over delayed foreign nationality declarations.

Markets & Politics: Pakistan Stock Exchange slid sharply as KSE-100 fell 2,288 points amid political tensions and PTI’s march plans, with investors also weighing softer global oil prices. Trade & Industry: FPCCI warned the trade deficit widened 15.13% to $10.8bn in 1QFY27, blaming high cost of doing business, interest rates, power capacity charges and petroleum levies. Power Sector Costs: Capacity payments topped generation costs, with consumers paying Rs1,565bn in capacity charges versus Rs1,167bn for electricity generation—raising pressure on power bills. IMF-linked Reforms: Finance Division strengthened Pakistan’s Debt Management Office by creating a new DG (debt) role to manage domestic and foreign borrowing and coordinate with the IMF and credit rating agencies. Telecom Regulation: A draft competition framework could reshape telecom pricing and market monitoring, after reviews showed annual increases in major packages. Regional Connectivity: Kazakhstan, Uzbekistan and UAE signed an MoU for a railway corridor linking Central Asia to Pakistan’s seaports via Afghanistan. Geopolitics & Shipping: Iran says about 12,000 containers are stranded in Pakistan as transit bottlenecks persist. Business & Lifestyle: PIA opened cabin crew recruitment in Karachi; MCB offered 0% markup iPhone 18 Pro installments up to 36 months.

PTI Long March: Imran Khan’s supporters began a protest march in Khyber Pakhtunkhwa after talks to avoid the demonstration stalled, with demands focused on Khan’s access to doctors and his sisters’ release. Sindh Quota Debate: Fresh scrutiny of Sindh’s job and education quota regime is growing after MDCAT results showed rural districts outperforming, reigniting calls to abolish quota. Karachi Enforcement & Fires: Encroachments keep spreading across Karachi despite directives, while major garment-factory blazes in SITE were brought under control with no casualties reported. Tax & Trade Rules: Lahore High Court said paying a disputed amount under protest isn’t an admission of guilt for FBR; customs valuation for dry grapes imports from China/Iran/Afghanistan was raised after documents weren’t provided. Energy & Agriculture: Petroleum minister said LPG import facilitation is being prepared to avoid shortages; SBP flagged insurance and warehouse gaps as key constraints to farm lending. Business & Payments: 1LINK expects payment transactions to top 12bn in 2026; Punjab launched five PPP road projects, aiming for Rs22bn revenue. Regional Talks: Moscow Format consultations on Afghanistan are set for today in Moscow.

IMF & Power Sector: Pakistan and the IMF have inched forward on the 4th review, with talks nearing consensus on the MEFP draft and a timeline for DISCO reforms/privatisation, including FESCO, GEPCO and IESCO targeted by March 2027. Punjab PPP Roads: Maryam Nawaz inaugurated five road projects under Punjab’s PPP Authority, handing toll, maintenance and repair to private firms; the deal is projected to generate Rs22bn and includes electronic toll plazas. PTI Long March: Govt-opposition talks to avert PTI’s Oct 4 long march collapsed early Sunday over counterterrorism cooperation in KP and access to jailed Imran Khan; PTI began the first phase from Lakki Marwat. Energy & Inflation Watch: Petroleum Minister Ali Pervaiz Malik said any relief for inflation-hit consumers depends on actual cuts in international oil prices, warning against repeating the 2022 subsidy approach. Trade/Markets: Pakistan’s exports rose 17.6% YoY in September, while the trade deficit widened (reported around $10.8bn in the first quarter). Security: Security forces killed eight TTP-linked militants, including three commanders, in an intelligence-based operation in Dera Ismail Khan. Solar Push: Solar power adoption is expanding across Pakistan, letting households and small businesses generate electricity and cut reliance on conventional supply.

Port Trade Facilitation: Pakistan’s Maritime Affairs Minister ordered faster work on a Karachi “one-door” facilitation centre to bring port-related services under one roof. Stock Market Mood: PSX ended the week lower, with the KSE-100 slipping below 170,000 amid weak sentiment, higher yields and a widening trade deficit. Tax Push for Digital Economy: Content creators and influencers asked for tax concessions, arguing FBR withholding on platform earnings may overburden digital entrepreneurship. Exports & Agriculture: PM says Pakistan will export an extra 70,000 tonnes of rice to Malaysia, aiming to lift farmers and expand market access. Industrial Policy & Compliance: Textile officials backed production and export-led growth while the government flagged a national compliance authority to meet buyer sustainability demands. FBR Valuation & Costs: FBR raised customs assessment values for massage chairs and massagers, signalling higher import duties and consumer prices. Legal Rulings: LHC rejected property tax exemptions for a private medical college/hospital, saying lessees can’t dodge liability. Regional Politics: PPP warns against emergency/governor’s rule in KP without political dialogue, as talks with PTI end in stalemate. Healthcare & Cities: Sindh earmarked Rs5bn to activate Karachi’s Treatment Plant-I and Punjab’s CBD Lake upgradation entered its final phase.

Trade & Inflation: Pakistan’s exports rose 17.6% in September to $2.94bn, but imports climbed to $6.49bn, widening the September trade deficit to $3.56bn; in the first quarter, the deficit jumped 15% to $10.79bn. Inflation also eased to 10.3% in September (from 11.1%), yet energy and fuel costs kept pressure on households. Gold & Commodities: Gold prices in Pakistan fell sharply, with 24-karat per tola down to Rs436,336 as international bullion slipped. Capital Markets/Regulation: SECP has moved the long-running Bagasra Securities case to the FIA for further probe and recovery, with about Rs48.9m still owed to investors. Business Facilitation (Ports): Pakistan’s maritime ministry is pushing a “one-door” facilitation centre in Karachi to streamline port-related services. Policy/IMF: IMF discussions on Pakistan’s draft auto policy 2026-31 remain inconclusive, with the Fund seeking more data. Education/Leadership: Dr Wasim Qazi appointed VC of Karachi University for four years. Sports (Business interest): Fatima Sana signed with Perth Scorchers for WBBL 2026-27; meanwhile, India beat Pakistan by 19 runs to win Asian Games men’s cricket gold.

PSX Watch: Pakistan Stock Exchange closed lower as the KSE-100 slipped 481 points on subdued volume, with investors cautious amid local political noise and external oil/geopolitical risks. Trade Data: Pakistan’s trade deficit rose over 6% YoY to $3.56bn in September as exports grew but imports climbed faster. Food Security: US FAS says Pakistan approved up to 1m tonnes of wheat imports in 2026 after flour prices jumped, blaming shifts in procurement that pushed farmers toward private traders and speculation. IMF & Subsidies: Petrol relief remains in limbo as the IMF presses for targeted support while Pakistan seeks to keep broader relief for small vehicles for now; gas circular debt also weighs on talks. Energy & Industry: Kohinoor Energy and Hebei Juhang plan a battery manufacturing venture in Pakistan, aiming to start with 50–100MWh and scale up. Business Regulation: SECP floated an accreditation framework for insolvency professionals to improve liquidation/rehabilitation efficiency and transparency. Security & Economy: Islamabad’s container barricades ahead of a PTI march are disrupting transport and raising costs for goods movement. Corporate Risk: A US court ruling warns that sanctions evasion tied to terrorism can trigger liability for companies doing business with sanctioned groups.

Inflation Watch: Pakistan’s CPI inflation rose to 10.3% YoY in September, with energy and fuel prices keeping pressure on households. IMF & Energy Reform: Talks are expected to finalise a shift from untargeted electricity subsidies to direct cash transfers via BISP, with the aim of better targeting and reducing circular debt. Public Finance Overhaul: The Finance Division has started measures to strengthen public finance management, fiscal forecasting, budget execution and performance-based budgeting. Retail Tax Push: FBR will map non-compliant shops nationwide under the Asaan tax scheme, aiming to pull more retailers into the tax net through a mix of outreach and enforcement. FBR Enforcement Tech: FBR empowered inland revenue officials to seal textile/spinning and other premises that don’t integrate with electronic monitoring systems. Agriculture Support: NA panel recommended wheat MSP at Rs5,000/40kg and urged a uniform subsidy mechanism; food minister also signalled MSP above Rs4,000. Fuel Relief Progress: PM’s Fuel Relief Scheme has benefited 7.5m people, with millions registered and tokens issued. LNG Supply Risk: PBIF warned Qatar’s LNG suspension until Nov 5 could force industrial cutbacks and disrupt export commitments. Market & Policy: PSX saw a sharp fall amid selling pressure, while finance minister highlighted housing and capital formation via REIT listing. Security & Cross-border: Pakistan carried out drone and aerial strikes in Afghanistan, killing 22 terrorists, as officials warn patience is wearing thin over attacks from Afghan soil. Tech & Consumer: PTA told IHC there’s no law to ban social media for under-16s, while BYD showcased Pakistan’s first locally assembled BYD Sealion 6.