AGP Executive Report

Fuel Pricing Shock: Pakistan’s government raised petrol by Rs5.44 and high-speed diesel by Rs31.05 per litre for 18-20 July, triggering transport fare hikes in Lahore and fresh pressure on logistics costs. External Financing: Pakistan secured over $16bn in foreign loans/financing in FY26, with Saudi Arabia the biggest bilateral supporter, though the overall borrowing target was missed. Karachi Port Upgrade: Karachi received its first-ever RoRo shipment of 2,000 electric vehicles, signalling a push to modernise maritime trade and attract transshipment. IT Exports Boom: Pakistan’s IT exports hit a record $4.6bn in FY25-26, up 21%, as the government aims to lift tech exports further under Uraan Pakistan. Currency & Tender Watch: India moved toward polymer banknotes, while Pakistan’s RBI currency arm also invited global bids for polymer note material. Regional Security Tension: Pakistan told Iran that Houthi attacks on Saudi Arabia are “attacks on Pakistan,” a “red line” amid heightened West Asia risks. Tax Ruling: SC rejected input tax adjustment claims on construction materials, tightening compliance expectations for businesses. Education Exchange: US awarded 85 Fulbright scholarships to Pakistani students and researchers for US master’s and PhD study.

Ease of Doing Business Push: PM Shehbaz met URAAN Overseas Pakistan Summer Scholars, urging them to use global research and skills to support reforms and an export-oriented economy, and directed faster implementation of the Ease of Doing Business Act 2025. Fuel & Power Costs: Petrol and diesel prices were raised for July 18-20, with petrol up to Rs316.15/litre and HSD to Rs354.80/litre; separately, power firms sought an August fuel cost adjustment of Rs1.20 per unit (Rs15.7bn total) tied to higher RLNG costs, raising the risk of higher electricity bills. External Sector Watch: Pakistan’s current account slipped into a $649m deficit in June (FY26 deficit $139m) as imports rose faster than exports; meanwhile IT exports hit a record $4.6bn in FY26, up 21% year-on-year. Markets & Credit: PSX closed lower after profit-taking amid US-Iran tensions; auto financing rose 38% to Rs382bn and consumer credit expanded, while FinMin flagged gaps in Pakistan’s corporate debt market and pushed capital market reforms to cut reliance on banks. Trade & Investment Moves: Pakistan signed $440m China pharma deals and received its first RoRo shipment of 2,000+ EVs at Karachi Port, while commerce ministry pitched deeper Pakistan-Egypt economic ties. Policy & Governance: Lahore tightened construction/demolition safety rules to curb dust and debris; HEC directed universities to revamp curricula with AI and emerging technologies for Industrial Revolution 5.0. Security & Risk: Balochistan Liberation Army claimed a major attack on a security convoy in Mastung, and analysts warned Houthis’ strikes on Saudi Arabia could complicate Pakistan’s mediation role and raise economic uncertainty.

IT Exports Surge: Pakistan’s IT exports hit a record $4.6bn in FY2025-26, up 21% year-on-year, with freelancers crossing $1bn for the first time, as SBP data points to tax relief and supportive measures. External Balances: Pakistan posted a current account deficit of about Rs39.5bn in FY2025-26, reversing last year’s surplus, while June showed a sharp deterioration versus a year earlier. FX & Markets: The rupee edged up slightly against the dollar, and the PSX opened higher with the KSE-100 gaining modestly despite volatility. Fuel & Inflation Watch: With global oil prices firming on Middle East risks, petrol and diesel prices are expected to rise from July 18, potentially adding up to Rs40 per litre. Pakistan-China Diplomacy & AI: Ishaq Dar wrapped up talks in Shanghai, with both sides agreeing to deepen CPEC 2.0 and expand cooperation in AI and the digital economy; China also urged responsible, non-dominant AI development. Regional Security: Pakistan and China urged the US and Iran to stop hostilities and resume talks, as tensions around the Strait of Hormuz keep threatening trade and energy flows. Maritime Upgrade: Karachi received its first RoRo vessel carrying 2,000+ EVs, a logistics shift aimed at cutting handling time and costs. Humanitarian/Health: UN called for impartial investigations into deaths in Pakistan-administered Kashmir unrest, while Karachi’s hospital-linked HIV outbreak has reportedly reached 130+ positive cases.

Middle East Risk to Economy: PM Shehbaz Sharif ordered full preparedness as US-Iran tensions escalate, warning regional uncertainty could hit Pakistan’s economic outlook; authorities also moved to curb artificial fuel shortages. Fuel & Energy Watch: NCMC said Pakistan has ample petroleum stocks and supply is uninterrupted, while HSD and petrol price revisions are being discussed amid volatility; separate reports flagged possible hoarding and urged action against OMCs/petrol pumps. Pakistan-China Tech & Trade: Ishaq Dar met China’s Wang Yi in Shanghai, reaffirming CPEC 2.0 and AI cooperation; Pakistan also joined WAICO as a founding member, while NTC plans sovereign AI infrastructure via GPUaaS/MaaS. EU Market Access: EU reports Pakistan remains the biggest GSP+ beneficiary, with €7.5bn exports benefiting in 2024 and €732m tariff savings, but warned compliance must translate into real on-ground improvements. FX & Growth Signals: SBP said forex reserves fell by $1.24bn on external debt payments; IMF kept GDP growth forecast at 3.5% for FY26-27. Business & Investment: Dutch bedding/home textiles firm The Beddinghouse plans a Lahore office and circular textile investment; Pakistan invited Chinese investment in high-tech slaughterhouses for meat exports. Digital Economy: TikTok launched AI literacy initiatives in Pakistan, and travel rules tightened for overseas Pakistanis with expired NICOP.

Fuel & Energy Crunch: Oil companies warn petrol reserves are down to about two weeks, citing delays in customs clearance and unpaid dues, as supply risk rises amid US-Iran Strait of Hormuz tensions. Digital Payments Push: PM directs that remittances be fully processed digitally to speed the cashless economy; SBP backs PayPak co-badged debit cards for wider acceptance. Capital Markets: PSX extends recovery as oil stabilises and investors look to earnings season, with KSE-100 jumping over 2,600 points. Trade & Industry: Big Bird Foods wins a major Gulf halal poultry export contract, while Wahdat Poultry approves expansion plans (egg powder line, grain silos). Investment Diplomacy: Pakistan-Türkiye business talks highlight joint ventures and tech transfer; a Pakistan-China B2B conference targets pharma and manufacturing investment. Crypto & Sharia Debate: PVARA seeks seminary clarification on crypto vs asset-backed tokens after fatwa concerns. Aviation Connectivity: South Air starts scheduled domestic flights from Karachi, adding routes to Turbat, Quetta, Bahawalpur and Islamabad. Geopolitics: Pakistan urges US and Iran to stop violence and resume talks under the Islamabad MoU, warning of spillovers to energy, trade and food security.

Uzbekistan Ties: Pakistan will sign a five-year economic cooperation roadmap during Uzbekistan Deputy PM Jamshid Khojayev’s July 20-21 visit, with a Pak-Uzbek B2B forum (100+ Uzbek firms) focused on agriculture, medicine, transport, logistics and industry. Fuel Supply Watch: Oil marketing firms warn of a petrol supply risk as customs clearance delays and WeBOC technical issues could disrupt imports; OCAC flags 15 days of stock and unpaid Rs66.7bn price differential claims. Digital Payments Push: SBP says PayPak will be central to Pakistan’s cash-lite digital payments future, highlighting growth in digital transactions and remittances through digital channels. Crypto vs Clerics: PVARA chief Bilal bin Saqib seeks clarification from Jamia Darul Uloom Karachi after a fatwa questioned crypto’s Islamic permissibility, clouding Pakistan’s crypto push. Markets & Money: PSX rebounds, lifting KSE-100 back above 175,000 after two losing sessions. Umrah Rules: New Umrah regulations require licensed operators and banking-based payments under the Hajj and Umrah Act 2024 to improve transparency and protect pilgrims. Regional Unrest: Protests in Pakistan-administered Kashmir leave at least nine dead as JAAC supporters clash with security forces; a Muzaffarabad march is set to resume if demands aren’t met by July 21.

Punjab Industry Push: Punjab CM Maryam Nawaz launched an interest-free pink salt value-add financing scheme and announced a 110-acre processing zone near Quaidabad, targeting up to $300m annual foreign exchange and up to 10,000 jobs, with loans of Rs5m–Rs50m for processing and a five-year repayment period. Tax Reform for Traders: PM Shehbaz directed FBR officials to hold monthly meetings with Karachi businesses and unveiled a fixed tax draft for small shopkeepers—1% of gross turnover (min Rs25,000) for eligible single-shop retailers—aimed at widening the tax base. Capital Markets: PSX rebounded as KSE-100 gained over 1,260 points amid Hormuz-related jitters, while Ghandhara Tyre secured US DOT certification to export to the US. Corporate Funding: Supernet Technologies approved a Rs914.8m rights issue to expand its digital infrastructure and cybersecurity portfolio. Macro Outlook: IMF projects Pakistan inflation at 8.4% for FY2026-27, with single-digit inflation expected thereafter. Security & Crime: Karachi police arrested three suspects in the robbery-cum-murder of Dr Akash near Teen Talwar, recovering part of the loot. Climate & Risk: Shehbaz met UN humanitarian chief Tom Fletcher, stressing stronger preparedness and coordination for climate disasters.

Debt Management: Pakistan prepaid Rs4.72trn in public debt ahead of schedule in a first-of-its-kind buyback milestone, cutting refinancing and rollover risks and easing future interest burden. Digital Economy & Connectivity: PM Shehbaz pushed cashless payments as mobile banking users hit 137m and merchants using QR codes surged; meanwhile PTA told lawmakers 5G is live in 22 cities via existing infrastructure, with more rollout expected in 6-8 months. Auto Policy: AIDP 2025-30 talks are stuck over tariff roles between ministries and the Tariff Policy Board, with an extension of the current auto policy likely for another year. Energy & Industry: Govt approved Rs10bn TSG for Thar coal rail connectivity; Nepra cleared Rs332.3bn UoSC for NGC; and PAC questioned alleged irregularities in the Ministry of Industries. Trade & Investment: Sindh CM invited Indonesian investors, pitching Keti Bandar Port, facilitation centres and AI data centres; Pakistan’s IT exports hit a record $4.5bn. Agriculture & Food Prices: Punjab began wheat releases from stocks at Rs3,800/40kg to curb flour and bread prices, while Karachi wholesale markets face a strike over flour enforcement. Business Moves: Jazz took over 76.33% of TPL Insurance; PTCL confirmed Nadeem Khan as CEO. Global Watch: US-Iran Hormuz tensions escalated with new shipping restrictions and tariff reversals, keeping energy trade risks in focus. Security & Governance: PoK protests turned deadly in Rawalakot as security forces opened fire, adding to Islamabad’s legitimacy concerns.

Cashless Push: PM Shehbaz says moving Pakistan to a cashless economy is boosting transparency and growth, citing a jump in mobile banking users and digital processing of BISP payments. Market Shock: PSX slid sharply again as US-Iran tensions and Strait of Hormuz fears spiked oil prices, dragging KSE-100 by thousands of points. Corporate Moves: Islamabad High Court approved the Telenor Pakistan-Ufone merger, while PTCL named Mohammad Nadeem Khan as CEO and Jazz completed its TPL Insurance acquisition. Energy & Trade: Gwadar launched its first marine bunkering service, and Pakistan and Bangladesh reaffirmed cooperation including women’s empowerment. Security & Cyber: Pakistan-US agreed to deepen counterterrorism and cybersecurity ties; Pakistan was ranked among the most vulnerable to digital fraud, and a global fraud index flagged weak enforcement. Industry Watch: Auto policy talks with the IMF remain unresolved, so the government is extending the current auto policy for another year. Governance: NA panel alleged one person used multiple companies to secure most toll plaza contracts. Environment & Risk: K-Electric urged monsoon safety steps, while Rawalpindi’s flood preparedness delays raised public concern.

Gold & FX: Gold slid sharply as a stronger US dollar and hawkish Fed expectations hit sentiment, with Sprott’s Paul Wong linking June’s steep fall to the US-Iran Islamabad MoU fallout and rising rate-hike bets. Markets: Pakistan’s KSE-100 sank over 2,300 points amid regional risk-off sentiment tied to US-Iran escalation. Energy & Fuel Pricing: With Strait of Hormuz tensions back in focus, Pakistan’s petroleum pricing panel discussed transparency reforms, while the minister said local petrol/diesel remain broadly cheaper than several regional peers. Middle East Trade Shock: Iran and the US both claimed control over Hormuz after fresh strikes, while China urged safe navigation; Trump also floated a 20% cargo fee for Hormuz transit. Pakistan-Sindh Investment Push: Sindh pitched itself as an investment gateway, citing one-window facilitation and mega projects, including a Karachi development package exceeding Rs100bn. Healthcare Accountability: CM Murad Ali Shah ordered strict action after an HIV outbreak at Kulsum Bai Valika Hospital, with dozens of officials and staff facing inquiry. Women Empowerment: OIC’s Islamabad Declaration was adopted, with Pakistan’s leadership urging women’s socio-economic and digital inclusion. Corporate & Finance: Select Technologies raised Rs3.02bn in its IPO; Mastercard and Bank of Punjab expanded ties to push cashless payments. M&A: Nishat Group’s record cross-border acquisition of Rafhan Maize Products (Rs66bn) cleared a major milestone. Security & Crime: A young doctor was shot dead in a Karachi robbery near Teen Talwar as robbers escaped with Rs2.5m. Tech & Cyber: New Android malware RedHook was flagged for bank-account theft via fake apps and high-permission access.

Digital Currency & Sharia Ruling: Mufti Taqi Usmani and Darul Uloom Karachi have declared buying/selling digital currency “haram,” saying it doesn’t qualify as Sharia property, as Pakistan’s crypto regulator seeks dialogue with scholars. Markets & Oil Shock: Renewed US-Iran strikes pushed oil up 4%+ and rattled the PSX, with the KSE-100 sliding over 2,000 points amid inflation and external-account worries. Digital Governance Overhaul: Pakistan’s IT ministry plans a major review of PTA, NITB, PSEB, Ignite and other digital bodies to reduce overlaps and tighten coordination for the digital economy. Banking Leadership: Standard Chartered Bank Pakistan appointed Adil Salahuddin as incoming CEO (subject to approvals). Tax System Push: FBR’s digital tax drive is expanding, using banking data to flag high-value transactions and undeclared income. Aviation & Corporate: PIA named former Ethiopian Airlines CEO Tewolde Gebremariam as its new CEO to support turnaround and efficiency. Legal/Property: Pakistan’s top court set aside the Monal Restaurant demolition order, sending ownership questions to trial courts. Energy/Trade Risk: Iran says the Islamabad MoU is effectively ended and warns of targeting US bases, while also claiming a safe maritime corridor through Hormuz.

Middle East Energy Shock: Iran and the US traded fresh strikes as the Strait of Hormuz dispute flared again, with Gulf states reporting attacks and interceptions; Pakistan urged restraint and de-escalation, warning escalation could hit regional trade and the economy. Crypto Regulation & Shariah Debate: Pakistan’s crypto regulator Bilal Bin Saqib said digital assets need both technical and Shariah review after Mufti Taqi Usmani’s fatwa questioned crypto purchases, adding a new layer to Pakistan’s licensing push. Lahore Roti Price Deadlock: Tandoor owners in Lahore warned they may raise roti to Rs25 amid a deadlock with the Punjab government over official pricing versus rising flour costs. Islamabad Policy & Diplomacy: DPM/FM Ishaq Dar stressed stronger Pak-UK ties, highlighting the diaspora’s role in trade and investment. Pakistan-Russia Trade Push: Pakistan and Russia pledged to expand cooperation in trade, energy, agriculture, education and investment via a high-level webinar. Pakistan-Saudi Economic Talks: Finance and energy ministers met Saudi counterparts to deepen economic and energy cooperation. Energy Security & Infrastructure: Pakistan’s debt profile improved on fiscal discipline claims, while the government also flagged better debt management and investor diversification. Business & Trade Practicalities: LPG importers warned of a potential nationwide LPG shortage in days if pricing rules don’t reflect landed costs; Karachi also saw an automotive heritage book launch at NAPA.

OIC Women’s Conference: Pakistan kicked off the 9th OIC Ministerial Conference on Women in Islamabad with delegates from 57 member states, focusing on women’s social, economic and political empowerment, education, healthcare, entrepreneurship and closing the digital gender gap. West Asia Risk to Trade: Pakistan urged restraint after fresh US-Iran strikes, warning diplomacy is key to protect the Islamabad MoU and keep energy routes stable. IMF Support: The IMF will provide Pakistan an additional $3.6bn over the next 14 months, with reviews expected in September and conditions tied to fiscal discipline, tax reforms, energy-sector changes and circular debt reduction. Power Sector Costs: Pakistan’s unpaid CPEC power dues rose to Rs423bn, with disputes over late surcharges and energy purchase payments adding pressure on tariffs. Lahore Utility Complaints: Lahore consumers alleged LESCO used aggressive recovery tactics, including threats of meter removal even for short arrears, prompting intervention by the commissioner’s office. Crypto Policy Shock: Darul Uloom Karachi’s fatwa declared cryptocurrency trading impermissible, adding friction to Pakistan’s push for a regulated digital-asset market. Food Safety Crackdown: Punjab Food Authority sealed two food units and fined 27 others in Lahore over hygiene and adulteration concerns. Security in Balochistan: Security forces killed three more terrorists in Operation Shabaan, taking the total killed since July 5 to 105.

Reciprocal Trade Talks: Pakistan and the US say they made significant progress in negotiations on a reciprocal trade agreement in Washington, with both sides moving toward an early conclusion. Energy & Trade Logistics: Gwadar Port completed its first international ship-to-ship bunkering operation, supplying IMO-compliant VLSFO to a UAE-owned LNG vessel, while a high-level committee led by Ishaq Dar reviewed measures to improve port connectivity and trade efficiency. Fuel Prices & Policy: PTI rejected the latest petroleum price hike, while the government said it is keeping an eye on sugar reserves to prevent hoarding and price spikes. Power Sector: The FCC will resume hearings on the gas levy on captive power plants from July 15 under an IMF-backed reform, and the government is pushing battery storage as rooftop solar reshapes demand patterns. Markets & Finance: The World Bank downgraded its performance rating for a USD100m Karachi solid waste project due to delays and weak contract management; meanwhile, SECP reforms are moving toward faster bank account verification for investors. Digital Economy: PVARA chairman Bilal bin Saqib met Mufti Taqi Usmani to discuss Shariah considerations for digital assets, stressing separate assessment for different technologies. Social & Human Capital: Punjab expanded its Model Village Programme and Nawaz Sharif Schools of Eminence saw over 71,000 applications, as PM Shehbaz warned population growth is pressuring jobs and services.

IMF Support: IMF will release an additional $3.6bn to Pakistan over the next 14 months, with the next review expected in September, under EFF/RSF conditions on fiscal discipline, tax reforms and energy/circular-debt measures. US Trade Talks: Pakistan and the US say they’ve made significant progress toward a reciprocal trade agreement after two days in Washington, aiming to replace temporary tariff arrangements and broaden cooperation. Energy & Renewables: Pakistan has become the world’s third-largest solar panel importer (17GW in 2024), driven by high tariffs and cheaper global prices, while the Neelum-Jhelum hydropower project remains offline until 2028 after tunnel damage. Ports & Trade Logistics: DPM/FM Ishaq Dar pushed port connectivity and trade facilitation reforms to turn Pakistan’s location into an economic asset. Cybersecurity Push: National CERT finalised a Pakistan Information Security Framework for government systems, including mandatory audits and moving foreign-hosted sites to local data centres. Fuel Costs: Petrol and diesel prices rose again, with petrol up Rs13.18/litre and diesel up Rs13.80/litre, plus kerosene increased Rs11.19/litre. Digital Finance: SECP enabled IBAN-based digital verification for faster KYC onboarding, and FBR expects digitalisation to lift tax collection. EU Trade Warning: EU flagged Pakistan’s human-rights record, warning it could jeopardise GSP+ benefits.

Airport Privatisation Push: Pakistan’s Privatisation Commission has appointed the Asian Development Bank (ADB) as financial adviser to outsource Islamabad International Airport operations via a long-term concession, with competitive bidding aimed at boosting efficiency and passenger experience. Telecom & Connectivity: PTA issued 47 district-level internet licences in 2026 (Lahore led with seven), using 10-year Class Licences to expand broadband and spur local competition. Inflation Relief, Fuel Watch: Pakistan’s weekly SPI eased 0.45% (YoY still 11.94%) as tomato, LPG and some fuel prices fell, but potatoes, onions and chicken rose—while petrol is expected to jump again, with OGRA calculations pointing to another hike. Energy Security: Pakistan sought a spot LNG cargo after Gulf tensions disrupted Qatar supplies; SNGPL declared force majeure, raising risks for electricity generation. Markets & Finance: PSX surged in early trade, while World Bank approved about $375.9m for Pakistan’s grid stability and modernisation. Corporate/Transport: PIA shortlisted Ethiopian Airlines’ ex-CEO Tewolde Gebremariam as CEO, as the carrier’s revival plan gathers pace. Security & Economy Link: Balochistan operations killed 75 suspected insurgents amid heightened crackdown concerns for business confidence. Islamic Finance Debate: A top scholar issued a fatwa saying cryptocurrency transactions are impermissible under Islamic law.