AGP Executive Report

US-Iran Mediation Push: Pakistan’s role as the key go-between is intensifying as Field Marshal Asim Munir heads to Tehran and Iran says the latest US proposal has “narrowed the gaps,” while Washington warns a deal collapses if Iran insists on enriched-uranium handover or Strait of Hormuz tolls. Diplomatic Signals: Iran’s foreign minister met Pakistan’s interior minister in Tehran as messages keep flowing; Rubio calls it “slight progress,” but optimism is fragile amid threats of escalation. Regional Pressure: Iraq is drafting an emergency plan to plug a $9.5bn monthly deficit tied to oil-export disruptions from Hormuz closures. Domestic Politics: PTI protesters held a rally in Islamabad despite Section 144. Markets: PSX slid 670 points on profit-taking ahead of Eid. Tech Spotlight: Pakistan was named “Country of Honour” at World Drone Congress 2026 in Shenzhen.

US-Iran Mediation: Indirect talks between Washington and Tehran are showing “some good signs”, but key sticking points remain over uranium and any tolling system for the Strait of Hormuz, with Pakistan’s role front and centre as Iran’s foreign minister meets Pakistan’s counterpart in Tehran and US Secretary of State Marco Rubio points to progress ahead of a possible breakthrough. Pakistan-China 75 Years: Pakistan will issue an SBP Rs75 commemorative coin from May 25 to mark 75 years of diplomatic ties with China, as PM Shehbaz prepares a China visit (May 23-26) to deepen cooperation. Markets & Energy Pressure: PSX buying continues on hopes for US-Iran talks and softer oil, while Eid-ul-Azha holidays keep SBP closed May 26-28. Legal & Social: Islamabad High Court bans killing stray dogs and orders humane catch-neuter-vaccinate-release. Security & Crime: Pathankot police claim a CCTV-based espionage racket feeding Indian troop movements to handlers in Pakistan. Economy Watch: Sindh bans inter-provincial wheat movement; wheat targets are revised downward due to climate stress.

US–Iran Mediation Push: Pakistan is stepping up again as Army Chief Asim Munir is set to travel to Tehran, with US Secretary of State Marco Rubio calling “some good signs” for a deal—while warning diplomacy could fail fast if Iran won’t meet demands. Strait of Hormuz Tolls Clash: The biggest sticking point remains Iran’s push for a permanent Hormuz toll system and control claims, which Washington says would be unacceptable and could derail any agreement. Oil Market Whiplash: Gulf stocks bounced on deal hopes, but oil prices swung after reports of “hours” to an announcement—then reversed as uranium and toll disputes stayed unresolved. Energy Policy Pressure at Home: A parliamentary forum warned against using Pakistan’s petroleum levy as a fiscal tool, saying it fuels inflation and exposes energy and governance fragility after the Gulf shock. Pakistan-China Momentum: On the 75th anniversary, Pakistan and China reaffirmed “ironclad” ties, while Pakistan’s PSX welcomed Sitara Petroleum’s Rs4.8bn IPO. Tech & Health Glimpse: A British-Pakistani scientist in Qatar says an AI eye scan could help detect dementia and nerve damage early—potentially relevant for Pakistan’s rising diabetes burden.

IMF Budget Talks: The IMF mission has wrapped up its May 13-20 visit, but talks on Pakistan’s FY2027 budget will continue “in the coming days,” with both sides reaffirming a 2% of GDP primary surplus target and a push to broaden the tax base and improve spending efficiency. PSX Momentum: Markets stayed upbeat as the KSE-100 rose over 3,000 points in early trade, with buying seen in banks, OMCs, cement and oil & gas. UN Friction: Pakistan and India traded sharp accusations at the UN Security Council on civilian protection, with Islamabad hitting back over terrorism and minority persecution claims. US-Iran Mediation: Pakistan’s Interior Minister Mohsin Naqvi is again in Tehran as Washington and Tehran exchange proposals, while Trump signals diplomacy could close quickly if “right answers” aren’t provided. Trade & Ports: Pakistan invited Kuwait to invest in ports and energy logistics, while Pakistan and Kenya pledged to double bilateral trade within five years. ECC Update: PM Shehbaz expanded the Economic Coordination Committee by adding MQM-P’s Khalid Maqbool Siddiqui. Eid Holiday Calendar: SBP, banks and the stock market will be open only on May 25 and May 29 around Eidul Azha.

US–Iran Mediation: Reports say a US-Iran draft deal could be finalised within hours, as Trump warns “final stages” diplomacy—while Iran counters that talks continue via Pakistan and accuses Washington of trying to reignite war. Regional Security: Pakistan’s Interior Minister Mohsin Naqvi is again in Tehran to keep the channel open. Energy Shock: The US boarded an Iranian-flagged tanker in the Gulf of Oman and says it’s redirecting ships to enforce a blockade, keeping Strait of Hormuz risks front and centre. Pakistan–UK Ties: UK NSA Jonathan Powell met PM Shehbaz, praising Pakistan’s role in de-escalation and discussing security and trade. IMF Pressure on EVs: IMF talks seek 18% GST on electric vehicles, while Pakistan proposes a lower 1% rate to spur adoption. Markets: PSX stayed bullish, closing up 1,934 points. Pakistan–China: PM Shehbaz met a Chinese delegation on CPEC’s next phase and SBP plans a Rs75 coin for 75 years of ties.

Green Sukuk Push: Pakistan has earmarked about Rs11.256bn (35%) from its first domestic Green Sukuk proceeds for dams and hydropower, including the Garuk Storage Dam, Naigaj Dam and the 26MW Shagarthang Hydropower project, with the rest to be allocated within 24 months. Energy & Industry: SIFC has moved to revive the long-stalled Tuwairqi Steel Mills by approving gas supply, while Sindh told the assembly that BRT’s Red Line will switch to electric buses—so biogas output will be redirected to industry. Markets & FX: PSX buying continued early as KSE-100 rose over 500 points on easing Iran-war fears; the rupee stayed broadly stable in open-market trade. Policy & Governance: FCC allowed late clarificatory amendments in a major land dispute case, and the Punjab govt imposed Eidul Azha restrictions under Section 144 over health and sanitation concerns. Regional Trade: Pakistan invited Kazakh investment in Gwadar and Karachi port projects, and AIIB signed a $320m loan for N-5 highway reconstruction.

Middle East Tensions: Trump says the US was “an hour away” from striking Iran, but postponed it after Tehran’s latest proposal—now warning a “big hit” could come within days if no deal is reached. Pakistan’s Diplomatic Role: Pakistan is again named as the channel for US-Iran talks, while PM Shehbaz reiterates resolve to defend sovereignty amid the regional churn. Infrastructure & Finance: EAD and AIIB signed a $320.16m loan for N-5 highway reconstruction, with NHA also signing a separate project deal—another push to keep connectivity moving. Markets: PSX surged over 2,000 points on reports of the Iran strike delay, with the dollar slightly easing. Domestic Pressure: TTAP and PTI plan nationwide protests Friday over inflation, fuel prices, law-and-order concerns and Imran Khan’s treatment. Energy/Privatisation: Privatisation Commission invites EOIs for sale of three viable DISCOs (FESCO, GEPCO, IESCO). Tech/Policy: PTA imposed a nationwide ban on SIM sales between midnight and 6AM.

Middle East De-escalation: Trump says a planned Tuesday attack on Iran is “on hold” after requests from Gulf leaders, while Iran’s FM warns US “contradictory and excessive stances” are blocking diplomacy and Tehran insists nuclear enrichment is non-negotiable. Pakistan as Mediator: Pakistan’s ties with Iran are reaffirmed as Iran says exchanges with the US are continuing via Pakistan, even as the US keeps forces “ready” for a large-scale assault if talks fail. Oil & Markets: Oil prices slid about 2% on the pause, helping PSX rebound after a sharp selloff tied to US-Iran risk; investors are watching whether this is real de-escalation or just a pause. Local Economy & Governance: IMF talks push higher BISP support; PAC-II flags revenue leakages at Punjab’s Board of Revenue; and federal business-hour curbs are temporarily eased till May 31. Security & Trade: Pakistan deploys 8,000 troops and air defence assets to Saudi Arabia under a mutual pact, while exports to the Middle East fall 8% in April.

Protest Call: JUI-F chief Maulana Fazlur Rehman has announced nationwide protests from May 22, blaming rising inflation and warning that democracy is “failing” amid worsening law and order in Khyber Pakhtunkhwa and Balochistan. Saudi Security Link: Pakistan is reported to have deployed 8,000 troops, JF-17 jets, drones and a Chinese HQ-9 air defence system to Saudi Arabia under a mutual defence pact—while Islamabad also keeps acting as a key mediator in US-Iran talks. Middle East Pressure: Iran and the US exchanged fresh proposals via Pakistani channels as Trump again warned the “clock is ticking,” keeping oil markets jumpy and pushing governments toward opaque supply arrangements around the Strait of Hormuz. Business Relief: Pakistan lifted Eid business-hour restrictions until May 31, allowing shops and restaurants to operate without fixed closing timings. Markets Watch: PSX closed bearish, down 3,791 points, as investors stayed cautious on geopolitics. Finance & Reform: PM Shehbaz reviewed a Rs1.51tr PSDP for 2026–27, directing more funds to better-performing ministries, while the World Bank team discussed reform timelines.

Courts & Rights: The Supreme Court reiterated “bail is the rule, jail the exception” in a UAPA narco-terror case, granting bail to Handwara resident Syed Iftikhar Andrabi while ordering passport surrender and periodic police reporting. Corporate Watch: Pakistan Oxygen (PAKOXY) announced CEO Matin Amjad’s resignation effective June 25, with the vacancy to be filled later. Middle East Shock to Markets: Oil prices jumped as Strait of Hormuz fears returned—Brent pushed above $110—while US-Iran talks stayed stuck, with Trump warning “the clock is ticking.” PSX Mood: Pakistan’s KSE-100 slid nearly 1,600 points early Monday as investors sold off amid the same geopolitical jitters. Tax & Cost of Living: FPCCI urged budget tax relief for salaried workers, including cutting the top rate and scrapping “super tax.” Capital Markets: Service Long March Tyres’ IPO book was fully subscribed in about 5 seconds. Security: Pakistan forces killed 35 terrorists and captured three commanders in a Balochistan operation.

US-Iran Deadlock: The US and Iran stayed far apart on a deal to end the war and reopen the Strait of Hormuz, as Trump warned “the clock is ticking” and Iran said Washington offered “no tangible concessions,” while a drone attack in the UAE sparked a fire at the Barakah nuclear plant generator, raising nerves about a fragile ceasefire. Pakistan as Mediator: Pakistan’s role as a go-between remains in focus after PM Shehbaz called it a “shining moment,” and Iran’s interior chief met Pakistan’s Mohsin Naqvi in Tehran to push border security and trade. Indus Waters Treaty: Pakistan hailed a PCA supplemental award upholding limits on India’s water-control capability, reinforcing pondage restrictions despite India’s boycott. Drug Crackdown: Karachi’s “Pinky/Anmol” case escalated after her arrest linked to deaths in Sindh political families, with claims of a wider network. Trade & Growth Signals: China pledged at least $17bn in US agri purchases annually, while Pakistan saw 10,511 new company registrations in Feb–Apr and pushed digital transformation and 5G rollout targets.

India-Pakistan Tensions: Pakistan’s Army hit back hard at Indian Army Chief Gen Upendra Dwivedi’s “part of geography or history” remarks, calling them provocative and warning that any attempt to target Pakistan could trigger consequences “neither geographically confined” nor “strategically palatable,” while also urging India to “co-exist” peacefully. Constitutional Uncertainty: Law Minister Azam Nazeer Tarar says there’s “nothing clear yet” on the proposed 28th constitutional amendment and insists any move must proceed only with consensus and consultation in the coalition. Iran Mediation Push: Interior Minister Mohsin Naqvi met Iran’s counterpart in Tehran as Pakistan renews shuttle diplomacy to revive stalled US-Iran talks amid Hormuz-linked disruptions and a fragile ceasefire. Crime & Courts: Karachi police secured seven-day physical remand of alleged cocaine trafficker Anmol alias Pinki, as multiple cases continue to unfold. Business & Markets: PSX extended losses in a volatile week, while Sindh lifted earlier closing-time restrictions to ease pressure on trade and daily life. Energy & Climate: A new study says industrial electrification could cut energy costs by over 36% and emissions sharply by 2050.

Middle East Diplomacy: Pakistan’s interior minister Mohsin Naqvi is in Tehran to help restart stalled Iran–US peace talks, as Iran and Pakistan also agreed on joint steps to facilitate border trade and transit—while Israel hit southern Lebanon despite a truce extension. Border Trade & Energy Routes: Iran says Strait of Hormuz transit will normalize only when security improves, and a new Iranian mechanism is set to manage traffic and collect tolls—keeping global shipping and regional costs in focus. Karachi Enforcement: The FIA has ordered a detailed probe into its Sarafa Bazaar raid after claims that far less silver was recovered than expected, with questions now swirling around how the operation was handled. Economy & Markets: Pakistan marked a first for seafood exports, crossing $500m, and finance minister Aurangzeb called the inaugural Panda Bond a “transformational step” to deepen China ties. Digital Governance: The government unveiled new civil service conduct rules, including electronic asset declarations and tighter digital behaviour standards. Humanitarian Pressure: WFP says about 500,000 people have returned to Afghanistan since start-2026, with returns from Pakistan rising and straining host communities.

IMF Pressure Mounts: The IMF has imposed 11 new conditions on Pakistan’s reform programme, pointing to further increases in petroleum, gas and electricity prices and pushing tougher fiscal discipline, tax collection and transparency—along with a projected Rs15,267bn tax target and potential extra taxation of about Rs430bn. Panda Bond Breakthrough: Pakistan marked a major capital-markets milestone with its first Panda Bond in China—CNY 7.2bn programme and a CNY 1.75bn ($258m) sustainable issue—backed by ADB and AIIB, with the finance minister calling it a “historic” step in Pakistan-China ties. Energy Cost Shock: Circular debt in power and gas has surged to Rs5.206tr, raising the stakes for tariff rationalisation and subsidy reforms. Markets Stay Risk-Off: PSX extended losses, falling another 902 points as oil-price jitters and geopolitical uncertainty weighed on sentiment. Policy & Governance: Govt introduced sweeping new civil service conduct rules after 62 years, including public redacted asset declarations for senior officers. Consumer Relief/Reality Check: Short-term inflation (SPI) jumped 14.52% y/y, driven by fuel and food price spikes.

Panda Bond Breakthrough: Pakistan marked a major finance milestone in Beijing by launching its first Panda Bonds on China’s onshore market—CNY 1.75bn (about $250m) for green and social projects—oversubscribed more than fivefold, with plans for a wider CNY 7.2bn programme. Power Sector Push: The Cabinet Committee on Privatisation approved the transaction structure to privatise 51%–100% with management control for IESCO, GEPCO and FESCO, aiming to improve reliability and financial sustainability. Eid Cashless Drive: SBP launched a nationwide “Go Cashless” push for cattle markets, expanding digital payment coverage to 96 markets and setting up bank kiosks and QR payments. Healthcare in Balochistan: PPP chair Bilawal Bhutto inaugurated 11 welfare and health projects in Quetta, including the province’s first air ambulance and a modern trauma centre. Politics at Home: Senate members traded barbs over Imran Khan’s health and access to political prisoners. Trade Hours Relief: Punjab eased market closure rules until June 1, lifting the 8pm shutdown to boost Eid shopping. Geopolitics: Trump said the US accepted an Iran ceasefire as a “favour” to Pakistan, while Iran’s FM warned mediation is on a “very difficult course.”

Regional Diplomacy Push: Deputy PM and Foreign Minister Ishaq Dar welcomed Gulf and regional ambassadors for Pakistan’s Envoys’ Conference in Islamabad (May 14-18), urging practical recommendations to deepen economic cooperation and regional peace. Counter-Terror & Narco-Terror: Maharashtra ATS carried out raids across 40+ locations targeting alleged links to Pakistan-based gangster Shahzad Bhatti, while J&K police warned Bhatti’s network over narco-terror and said 806 people were arrested in 724 NDPS cases in a month. China Business Momentum: PM Shehbaz hailed “historic” Pak-China ties in talks with a Chinese business delegation, spotlighting digital economy cooperation and an IBI digital HQ in Pakistan. Energy & Trade Logistics: Pak Suzuki started a biogas plant and solar system in Karachi, and Pakistan cut Gwadar fees to attract transit traffic amid Middle East disruption. Markets & Policy: PSX selling extended into a fifth session as IMF added new structural benchmarks; IMF said recovery is on track but regional conflict remains a risk. Industry & Exports: KOICA launched a Pak-Korea technical textiles centre in Faisalabad; Colgate-Palmolive plans to buy P&G assets at Port Qasim. Sports & Culture: Hussain Rehar heads to Cannes with a Lahore fashion collection reclaiming South Asian craftsmanship.