AGP Executive Report

Iran Trade: Pakistan and Iran have suspended cross-border movement and exchanges at Taftan and Gabd-Rimdan, citing security and technical concerns. The halt adds uncertainty for traders as officials work toward reopening. Energy Outlook: Finance Minister Muhammad Aurangzeb says Pakistan has supplies through November and will avoid costly spot LNG unless needed, but warns attacks on Gulf energy infrastructure could threaten the recovery. External Accounts: Pakistan recorded a $356 million current-account deficit in September as imports climbed. IT exports rose 18% to $435 million, while reserves reached $21.5 billion, according to the SBP governor. Financing: Pakistan is set to chair the IMF and World Bank boards in 2027. Aurangzeb is also seeking longer-term financing and discussing reforms and credit-rating goals with international lenders and investors. Investment and Exports: Sindh’s Shanghai investment drive produced 34 agreements, while Pakistan’s first rice festival in Hungary aims to open doors to more European buyers.

Energy Risks: Finance Minister Muhammad Aurangzeb says Pakistan has supplies secured through November, but attacks on Gulf energy infrastructure threaten the longer-term outlook; the government is avoiding costly spot LNG purchases unless needed. Digital Exports: IT exports rose 18% year on year to $435 million in September, the second-highest monthly total on record. Freelancers earned a record $197 million. External Accounts: September’s current account deficit widened to $356 million as imports outpaced exports, despite higher remittances. Debt and Global Finance: Pakistan is discussing Sukuk and refinancing options with three UAE banks, but no deal has been reached. It will chair the IMF and World Bank boards of governors in 2027, a prominent role without control over lending decisions. Market Oversight: The competition regulator has introduced an AI system to flag suspected collusion in public contracts, part of a procurement market estimated at $60 billion a year. Trade: Iranian exports to Pakistan have been temporarily halted by banking sanctions, while imports from Pakistan continue.

Fuel Prices: Petrol fell Rs3.93 per litre to Rs386.30 for the next three days; diesel remains at Rs396.96. External Accounts: Pakistan’s current-account deficit widened to $356 million in September and $874 million in the first quarter, as imports rose; remittances reached $10.8 billion in the quarter. Exports & Financing: September exports rose 18% year-on-year, while IT exports climbed 19% to $435 million. Finance Minister Muhammad Aurangzeb discussed Pakistan’s reform agenda and financing needs with investors and rating agencies, while seeking a Fitch upgrade to BB. Agriculture: Prime Minister Shehbaz Sharif pledged to expand use of technology, improved seeds and efficient irrigation to boost productivity and food security, with better access to credit for small farmers. Trade & Tax Reform: The government is targeting $100 billion in annual exports by 2035; the FBR has also launched a faceless system for designated tax audits and assessments. Minerals: Pakistan’s mineral reserves are estimated at $8 trillion, with annual mineral exports targeted to grow to $8 billion.

External Accounts: Pakistan’s current-account deficit widened to $356 million in September from a revised $73 million in August, as imports grew faster than exports. The first-quarter gap reached $874 million. Financing: Finance Minister Muhammad Aurangzeb discussed Sukuk and further Panda bond issuance with Standard Chartered, while stressing export-led growth, stronger IT exports and debt sustainability in talks with US Treasury officials. Global Role: Pakistan will chair the IMF and World Bank boards of governors in 2027 for the first time since 1953, with Economic Affairs Minister Ahad Cheema named chair. Markets & Oversight: The KSE-100 rose 347 points to 166,533. SECP is pursuing action over discrepancies in SE Fruits’ IPO disclosures; the offering was suspended and investors refunded. Digital Finance: Mastercard and BankIslami will broaden Shariah-compliant card and payment services for consumers, SMEs and corporate clients.

Growth and Reserves: Pakistan is targeting 4% growth in FY27, Finance Minister Muhammad Aurangzeb said, while SBP foreign exchange reserves rose $16 million to $21.47 billion. Remittances are forecast to reach $44 billion this fiscal year. Fuel Prices: Petrol fell Rs3.63 to Rs390.23 per litre from October 16, while high-speed diesel edged up 31 paisa to Rs396.96. Export Pressures: Textile and hosiery groups urged the government to ease energy and financing costs; PHMA called for temporary export support of 6–8% of shipment value to protect orders and market share. Agriculture Finance: SECP proposed a digital national spot market linking farmers, warehouses, banks and buyers to improve prices and access to finance. Power Costs: IESCO has sought a 54% increase in its consumer tariff for 2027, saying it needs to strengthen its balance sheet ahead of privatisation. Markets and Development: The KSE-100 gained 768 points, while Pakistan and the ADB reaffirmed cooperation under the bank’s 2026–30 country strategy.

IMF and Reforms: Finance Minister Muhammad Aurangzeb reaffirmed Pakistan’s commitment to completing its IMF programme, citing stronger reserves and efforts to replace costly short-term debt with longer-term financing. He also made the case to Moody’s for a stronger sovereign rating. Growth Outlook: The IMF forecasts 3.5% growth and 9.9% inflation for FY2026-27, while Aurangzeb expects remittances to reach $44 billion this fiscal year. Investment and Trade: Sindh Chief Minister Murad Ali Shah invited Chinese investors to explore opportunities in the province, with more than two dozen MoUs announced at a Shanghai conference. Separately, Pakistan urged Chinese businesses to build manufacturing facilities and use the country as a regional export hub. Development Finance: Pakistan and the World Bank pledged to speed up the 2026-35 partnership framework, prioritising project readiness, concessional finance and investment in jobs and climate resilience. Digital Finance Risks: An IMF-World Bank paper estimates cyber-enabled fraud costs Pakistan 2.5% of GDP, the highest share in Asia.

Economic Outlook: The IMF projects Pakistan’s economy will grow 3.5% in FY2026-27, with inflation at 9.9%. Finance Minister Muhammad Aurangzeb says the fiscal deficit has fallen to a 22-year low. Markets & Costs: The rupee closed at Rs276.95 per dollar in the interbank market. Petrol rises Rs1.20 to Rs393.86 a litre from October 15, while diesel edges down. Exporters warn proposed power tariff increases of 5–10% will further weaken competitiveness. Business Finance: The prime minister has urged banks to expand lending to farmers, SMEs and homebuyers; Rs448 billion in housing loans has been approved. Investment & Exports: AsiaPak is seeking government backing for a Port Qasim aluminium smelter targeting more than $5 billion in annual exports. A Pakistani firm has also signed an MoU with a Chinese company to explore local electric-bus manufacturing. Regulation & Agriculture: SECP has approved an intelligence unit to spot suspected illegal financial schemes early. Wheat seed stocks cover just 51% of Rabi season requirements, prompting calls to make seed more affordable.

Markets: The KSE-100 rebounded 641 points to close at 165,418 after late buying, recovering from volatile trading. Growth and Inflation: Finance Minister Muhammad Aurangzeb expects growth above 4% this fiscal year and says Pakistan is widening its funding sources; the IMF projects 3.5% growth and 9.9% inflation in FY27. Digital Finance: Pakistan is exploring digital bonds, tokenised sukuk and AI-powered oversight to modernise capital markets and attract foreign investment. Business Lending: The government aims for Rs2.2 trillion in SME loans by 2028 and has cut Apna Ghar housing-scheme paperwork from 25 documents to five, with a 15-working-day processing target. Energy: Pakistan has received its first October LNG cargo, but winter supply concerns persist as gas demand is expected to rise sharply. Exports: Shehbaz Sharif has ordered a time-bound plan to develop gemstone mining and processing, citing major losses from poor practices and smuggling.

Economic Outlook: The IMF projects Pakistan’s FY27 growth at 3.5%, below the government’s 4% target, and inflation at 9.9%; it also expects the current-account deficit to reach 1% of GDP. Business Climate: Retailers and FMCG firms warn Islamabad’s sudden ban on PET-packaged products and sealing of shops could disrupt trade, recycling and government revenues. OICCI has urged the government to reverse the move. Funding: Finance Minister Muhammad Aurangzeb says Pakistan may issue more yuan-denominated bonds and explore samurai bonds to broaden its funding sources without increasing external debt. SME Finance: The government aims to double small-business financing to Rs2.2 trillion by 2028. Trade and Energy: Pakistan has sought faster Ethiopian approvals for pharmaceutical exports, while petrol prices fell Rs2.71 to Rs392.66 per litre and diesel edged down three paisa.

Economic Outlook: The IMF sees Pakistan growing 3.5% in FY27, below the government’s 4% target, with inflation rising to 9.9% and the current account slipping into deficit. Reform and Financing: Finance Minister Muhammad Aurangzeb reaffirmed tax, energy and state-owned enterprise reforms under the IMF programme, while calling for changes to global finance as Pakistan prepares to chair the G-24. The government is also targeting more than $1 billion from privatising five or six entities. Agriculture: Prime Minister Shehbaz Sharif says wheat support prices will be set with the provinces before sowing, balancing farmer returns with consumer affordability; he warned against hoarding. Business and Credit: The government plans to double SME financing to Rs2.2 trillion by 2028. Pakistan and the EU are exploring EV skills training as the country targets a 30% electric-vehicle share by 2030. Markets: The KSE-100 fell 348 points as investors took profits, reversing early gains.

Growth and Privatisation: Finance Minister Muhammad Aurangzeb forecasts growth above 4% this fiscal year and says the government aims to privatise five to six state-owned entities, potentially raising more than $1 billion. SME Financing: Prime Minister Shehbaz Sharif has doubled the SME lending target to Rs2.2 trillion by 2028, seeking to widen access to finance and support entrepreneurs. Fuel Prices: From October 13, petrol falls Rs2.93 to Rs395.37 per litre, while high-speed diesel rises 61 paisa to Rs396.85. Markets: The KSE-100 shed 1,965 points, closing down 1.18% amid broad-based selling. Energy Supply: Liberty Daharki Power has urged the government to restore gas to its 235MW plant, warning that its shutdown could mean costlier fuel or load-shedding. A winter plan prioritises household gas as LNG deliveries remain uncertain. Investment and Infrastructure: China’s Shengtang Group is considering a proposed $10 million MoU spanning EVs, energy and infrastructure; separately, the government secured $705 million for three sections of the M-6 motorway. Development Finance: The World Bank Group says it has mobilised nearly $3.2 billion in private capital for Pakistan since 2022.

Markets: The KSE-100 fell 1,965 points to 165,124 on Monday as political unrest in Khyber Pakhtunkhwa and regional tensions unsettled investors. Growth and Privatisation: Finance Minister Muhammad Aurangzeb forecast growth above 4% this fiscal year and said planned sales of five or six state entities could raise more than $1 billion; these remain targets, not completed deals. Energy: Pakistan is encouraging refineries to explore Libyan crude imports to diversify supplies, with no volumes or delivery dates agreed. Tax Reform: The FBR is expanding automated production monitoring to five more sectors, while the government aims to complete wider monitoring systems by December; AI checks of tax returns are also planned. Trade and Incomes: Textile makers warned exports could fall sharply from October to December, while September remittances reached $3.6 billion, up 12.7% year on year.

Fiscal outlook: The FBR collected Rs3.084 trillion in July–September, exceeding its target by Rs30.5 billion and rising about 7% year-on-year. Export pressure: Textile exporters warn goods exports are set to fall in the second quarter of FY27 as weak overseas demand and freight costs up to 2.5 times higher squeeze margins. Remittances: September inflows reached $3.6 billion, offering continued support to Pakistan’s external finances. KP funding: The World Bank has proposed $200 million to help the province raise its own-source tax revenue from Rs64 billion to Rs122 billion by 2031; the plan is not yet approved. Trade and industry: Pakistan is seeking to ease transit bottlenecks at Gwadar, while the FBR has cleared four vendors to install production-monitoring systems in five sectors. Business climate: The federal takeover of Khyber Pakhtunkhwa adds uncertainty as businesses already face high operating and energy costs.

Political Risk: The federal government imposed emergency and governor’s rule in Khyber Pakhtunkhwa, taking over provincial administration amid security concerns and protests. The move adds to uncertainty for businesses and investors. Remittances: Pakistan received about $3.6 billion in September, up 12.7% year on year. First-quarter inflows reached roughly $10.9 billion, compared with $9.5 billion a year earlier. Banking: The SBP eased housing-finance paperwork and allowed banks more flexibility in securing loans, including financing for solar equipment. Energy Costs: FPCCI called for industrial electricity tariffs below nine US cents per unit across all consumer categories, arguing high costs hurt competitiveness. Separately, the government plans to replace broad power and gas subsidies with targeted support for low-income households in 2027. IMF Programme: The IMF urged Pakistan to phase out broad fuel subsidies and maintain exchange-rate flexibility. A staff-level agreement could unlock about $1.2 billion, subject to board approval. Fintech: OPay, which operates in Pakistan and other markets, reported first-half revenue more than doubling to $467 million in its US IPO filing.

Digital Economy: Prime Minister Shehbaz Sharif opened Islamabad’s Daanish IT Park, calling it a hub for startups, SMEs and AI firms, and ordered transparent bidding for its operator. He said more parks would follow across the country. Energy & Industry: Karachi residents face power cuts of up to 18 hours as disrupted RLNG supplies squeeze generation. Business groups are pressing for industrial electricity tariffs below 9 cents per unit to boost exports. Prices: Karachi wholesalers warn flour costs may rise further, with retail fine flour at Rs190 per kg and chakki flour at up to Rs220. IMF & Markets: Pakistan’s $1.2 billion IMF staff-level deal offered some support, but the KSE-100 still fell 0.6% over the week to 167,089 amid geopolitical concerns. Finance Minister Muhammad Aurangzeb heads to the World Bank-IMF meetings in Bangkok for more than 60 engagements. External Flows: September remittances reached $3.59 billion, up 12.7% year-on-year, while foreign reserves rose to $26.8 billion. Infrastructure & Trade: ECNEC approved 11 projects spanning energy, roads, water and urban development. Pakistan also restored direct shipping links to seven European ports to support exporters.

Remittances: Overseas Pakistanis sent $3.59 billion in September, up 12.7% year on year; first-quarter inflows rose 14% to $10.87 billion, supporting the country’s foreign-exchange position. Export Push: Finance Minister Muhammad Aurangzeb says Pakistan’s poultry industry ranks 11th globally but exports remain small, with disease control, feed costs and cold-chain logistics among the barriers to growth. IMF and Investment: Pakistan reached a staff-level deal for about $1.2 billion in IMF financing. British International Investment called stabilisation encouraging but urged consistent policies and continued reforms to sustain investor confidence. Energy Costs: The IMF has called for an end to broad fuel subsidies as global supply disruptions raise pressure on energy-importing Pakistan; Karachi also faces possible power cuts amid an RLNG shortage. Markets and Trade: The KSE-100 fell 1,066 points over the week. Direct shipping between Karachi and European ports has resumed, offering exporters a new route to market.