AGP Executive Report

Tech & Consumer Electronics: HONOR wrapped up LEAP 2026 in Riyadh with its “ALPHA PLAN” and the world’s first Robot Phone, pushing a renewed “Dare to Be” identity beyond smartphones. Nutrition & Human Capital: Pakistan held the “Act for Nutrition” conference in Islamabad, warning malnutrition and stunting are underfunded despite “catastrophic consequences” for children and the economy. Trade Diplomacy: Pakistan and Kyrgyzstan signed multiple accords in Bishkek, including a plan to lift bilateral trade to $200m in two years, alongside cooperation on climate, education, and virtual assets regulation. Market Watch: PSX slid sharply as the KSE-100 fell 1,690 points to close at 174,776 amid broad-based selling. Business Hours Debate: A Senate panel recommended a 30-minute extension to business hours, but the Power Division opposed it citing higher electricity demand and fuel costs. Mobility & Payments: Jazz-backed ride-hailing platform “Driver” is set to launch, offering app access without mobile data consumption and using JazzCash for payments. Energy Crunch: Pakistan LNG Ltd reissued its LNG tender after rejecting an expensive offer, as shortages risk continued evening load shedding. Gold Prices: Gold in Pakistan dropped Rs11,300 per tola to Rs454,036, tracking weaker international bullion and a firmer dollar. Capital Markets/Fintech: QistBazaar raised PKR 500m via a privately placed Sukuk, signaling growing institutional funding for BNPL and installment finance. Public Sector Digital Services: Radio Pakistan became the first SOE to integrate with NADRA’s digital pensioner verification app for remote biometric checks.

SCO Tech & AI: Pakistan proposed an SCO sovereign AI infrastructure and governance framework as it assumes the 2026-27 chairmanship, aiming to keep AI responsible and inclusive across the bloc. Eurobond Push: The finance ministry has started the process for a US dollar benchmark dual-tranche Eurobond (five- and 10-year), signalling renewed access to global capital markets. Inflation Watch: August CPI inflation rose to 11.1% YoY, up from 9.2% in July, keeping cost pressures in focus. Fuel & Costs: Petrol increased by Rs1.08 and HSD by 51 paisa per litre for Sept 2, as Hormuz-linked oil price moves feed into domestic rates. Energy Sector Governance: A Senate panel flagged delays in the SSGC LPG Board and MD-related appointments, while another panel discussed extending business hours—opposed by Power Division due to LNG stock limits and higher electricity costs. Corporate Moves: Engro agreed to sell its entire 56.19% EPCL stake to Lotte Chemical Pakistan for about Rs19.7bn, pending approvals. Markets: PSX opened September cautious; KSE-100 closed down about 509 points amid geopolitical and oil-price worries. Trade/Tax Enforcement: RTO Hyderabad recovered untaxed goods after cracking down on digital invoicing non-compliance. Food Security: Punjab said there is no flour shortage, citing ongoing supply from government and private wheat. Environment & Compliance: EPA Punjab stepped up pre-smog inspections and enforcement, including brick kiln compliance checks. Livestock Exports: Parliament heard that concrete steps are needed to curb FMD to protect meat export competitiveness. Real Estate Finance: Naya Nazimabad Apartment REIT’s book-building was fully subscribed within an hour, ahead of its PSX listing. Digital Assets: PVARA briefed the finance minister after Hong Kong talks on stablecoins, compliance and tokenisation use cases for Pakistan.

SCO Summit & Regional Security: PM Modi urged SCO to dismantle the “ecosystem of terrorism” and reject double standards, while PM Shehbaz Sharif stressed water must never be weaponised and called for unconditional honour of the Indus Waters Treaty. Indus Waters Treaty: The Hague tribunal largely backed Pakistan, ruling India can’t unilaterally suspend the treaty and ordering interim limits on Ratle works pending a neutral expert’s final technical call. Pakistan Capital Markets: Pakistan has kicked off the process for a dual-tranche benchmark US$ Eurobond (5- and 10-year tenors) after credit upgrades and improved investor confidence. Telecom Power Costs: Telecom operators pushed for lower electricity tariffs and protection from load-shedding, submitting data on site power use, outage durations and generator costs. Manufacturing Pulse: HBL’s PMI rose to 51.8 in August, the highest since the war began, with orders and exports improving. EV Incentives (Sindh): Sindh extended EV tax/registration concessions for two years, keeping low registration and annual taxes for non-commercial EVs. Food Affordability: Rising costs are pushing households to cut nutrient-rich foods, worsening “hidden hunger” even when calories are met. Digital Nation: IT Minister Shaza Fatima Khawaja highlighted Pakistan’s Digital Nation Act and 5G push at LEAP 2026. Crypto & Regulation: Senate panel heard Pakistan has about 40m crypto-linked accounts, raising calls for tighter oversight.

Indus Waters Treaty: The Hague arbitration court ruled India cannot unilaterally put the Indus Waters Treaty in abeyance and ordered it to uphold obligations, while restricting work beyond set levels at Ratle Hydro-Electric Plant pending a neutral expert’s review. Fuel & power costs: OGRA adjusted September fuel prices—petrol up 77 paisa and HSD down Rs1.03—while the government apologised for night load shedding blamed on LNG supply constraints; LPG rates also rose for September. Tax administration: FBR collected about Rs1.72trn in the first two months of FY27 and tightened income tax assessment selection by requiring CRM-based assignment from Sept 1. Business & trade: Shipping to the US jumped over 200% on some routes amid Iran-war disruptions; FPCCI urged realistic diesel pricing, while LCCI launched a 2026 directory covering 51,708 firms. Agriculture policy: A committee reached broad consensus on a transition framework for GM and non-GM maize coexistence. Digital economy & telecom: TOA demanded repeal of a procurement rule enabling direct G2G contracting that it says crowds out private IT/telecom firms. Regional geopolitics: Pakistan, Iran and Uzbekistan pushed cooperation talks on SCO sidelines, while Pakistan also moved to institutionalise the Makkah Defence Alliance with a permanent secretariat in Saudi Arabia.

Power & Energy: Power Minister Awais Leghari apologised for night-time loadshedding, blaming a surge in demand and gas shortages, while warning high-loss areas face extra cuts due to theft recovery efforts. Markets: PSX opened weak and stayed choppy, with KSE-100 down in early trade as investors stayed cautious amid the US-Iran flare-up and higher oil prices. Trade Costs: Exporters say shipping to the US has jumped 200% on some routes after Iran-war disruptions, with Karachi–New York quotes rising to $8,000–$9,000 and threatening competitiveness. Indus Waters Treaty: The Hague’s Permanent Court of Arbitration ordered India to uphold the Indus Waters Treaty and suspend work on a Kashmir hydro project, with a neutral expert to assess compliance by July 2027; India rejected the ruling. Legal/Family Law: Lahore High Court ruled that in khula, a husband can reclaim only what he personally paid as dower, not gold funded by the wife’s father. Public Safety & Accountability: PM Shehbaz ordered suspension of eight officials and criminal proceedings over the PIMS neonatal ward fire that killed 14 newborns, citing missing fire alarms/sprinklers and weak emergency procedures. Security/Regional: Bangladesh signalled no immediate obstacle to joining the Makkah Joint Defence Agreement, keeping the door open for a wider security bloc. Digital Economy: Senate was told about 40 million Pakistanis holding crypto accounts opened without formal oversight, as regulators move to bring the sector under rules.

Energy & Power Sector: The Power Division invited international bids to rehabilitate Guddu 747MW’s steam turbine (ST-16), aiming to cut generation cost from Rs13.87 to Rs9.68 per unit and restore an extra 297MW; bids close Oct 7, 2026 with commissioning targeted for Dec 2028. Privatisation & Circular Debt: The Cabinet Committee on Privatisation asked Power and Finance divisions to craft an alternative to Circular Debt Financing for DISCO restructuring, to avoid equity increases post-privatisation, including a GoP-owned SPV for retirement benefits and lease-back arrangements. Trade & Industry: PAAPAM proposed a rationalised Auto Policy 2026-31 tariff structure—higher duties on CBUs and localised parts, with minimal/zero duty on raw materials—to protect jobs and localisation. Tax & Compliance: President Asif Ali Zardari rejected an FBR representation against a Federal Tax Ombudsman order, reinforcing taxpayers’ right to full transparency and access to assessment records. Business Climate: Pakistan Business Forum warned that recurring load management persists despite ~49,651MW installed capacity, blaming RLNG shortages and delayed LNG arrivals. Agriculture Exports: Pakistan and Saudi Arabia agreed to lift agri and food exports to $3bn within two years, prioritising rice, red meat, fruits, green fodder and water-efficient tech. Regional Deals: Turkey, Saudi Arabia and Pakistan will hold the first committee meeting under the Makkah Joint Defence Agreement in Istanbul, with defence industry cooperation on the agenda. Women’s Mobility: Sindh will distribute Pink Electric Scooties to women in Mirpurkhas in the next phase, expanding training and safe mobility across districts. Digital Finance: SBP-approved HugoBank completed licensing, while Pakistan’s virtual assets regulator said the country built its crypto framework in under six months with most budget unused.

AJK Governance Push: Nawaz Sharif and Shehbaz Sharif met newly elected AJK PM Iftikhar Gillani, sharing a 100-day reform plan focused on healthcare, education, sanitation and infrastructure, with Maryam Nawaz also present. Power Sector Reform: NEPRA rolled out new performance standards for electricity distribution companies, replacing rules from 2005 and adding consumer-focused “guaranteed” service benchmarks plus outage, complaint handling, safety and digitalisation metrics. IMF Procurement Pressure: The IMF urged Pakistan to stop routine direct contracting by government agencies to state-owned entities, pushing tighter public procurement rules and limiting such deals to exceptional, justified cases. Hospital Fire Accountability: After a maternity ward blaze in Islamabad killed 14 newborns, PM Shehbaz suspended eight officials and ordered criminal proceedings over alleged negligence, following a preliminary committee report. Energy Supply Strain: Power Division reported temporary nighttime load management after an RLNG cargo shortage cut generation, with furnace-oil plants used to balance demand, hitting Punjab hardest. Oil & Gas Mix: Pakistan’s crude output fell 1% week-on-week while gas production rose 1%, with OGDCL leading crude and gas contributions. Defence Pact Talks: Turkey, Saudi Arabia and Pakistan will hold the first committee meeting in Istanbul under the Makkah Joint Defence Agreement, aiming to boost deterrence, interoperability and defence industry cooperation. Inflation Hit in Lahore: Residents in Lahore say rising prices are forcing low-income families to struggle for even two meals a day. Tech & Trade Signals: Google formally entered Pakistan with a country office, while Alibaba Cloud showed interest in investing in Punjab’s AI and IT ambitions.

PIMS Fire Accountability: PM Shehbaz orders suspension and criminal proceedings against eight officials over the neonatal ward blaze that killed 14 newborns, including PIMS Executive Director and senior medical staff, after an interim inquiry and CCTV review. Fuel Pricing Reality Check: Despite daily pricing, petrol ended up net higher by Rs25.87/litre and diesel by Rs17.09/litre by Aug 29 after more increases than cuts. Diamer-Bhasha Dam Clarification: Economic Affairs Division strongly denies reports that the 4,500MW power component was cancelled, saying planning continues with WAPDA and hydropower remains a priority. Gold Slide: Gold fell Rs15,100 per tola to Rs467,936 as international prices dropped; 10-gram gold down Rs12,946 to Rs401,179. Digital Assets Push: PVARA Chairman Bilal Bin Saqib says Pakistan built a full virtual-assets regulatory system in under six months with limited spending, including AML/CFT and customer protection requirements. Energy & Investment Talks: Petroleum minister meets OICCI and PSO leadership in Karachi to review reforms, refining modernisation, strategic reserves and investment opportunities. Local Governance & Business Ease: PC extends IESCO privatisation EOI deadline to Sept 21; SC urges CCP to use competition advocacy to prevent high costs, not just punish. Trade & Investment Links: Uganda invites Pakistani investors with tax incentives and proposes a Pakistan-Uganda business forum; Uzbekistan opens a visa facilitation centre at GCCI to ease business travel. Crime & Safety: Punjab orders teaching hospitals to draft emergency/fire response plans within 24 hours; Karachi’s KDA demolishes illegal structures in Surjani Town; LHC directs special evidence rules for human trafficking cases.

Public Health: Health Minister Syed Mustafa Kamal urged an integrated national strategy to curb malnutrition, warning that about 11,000 mothers die annually in childbirth and 43% of children suffer stunting. Digital Economy & Finance: PVARA chief Bilal Bin Saqib said Pakistan is readying for the digital economy, noting a virtual-asset regulatory framework built in under six months using only 8% of its budget. Debt Management: Pakistan made its biggest-ever early domestic debt repayment—Rs1.2tn to SBP ahead of maturity—bringing cumulative early retirement to about Rs5.92tn. Power & Policy Clarity: Govt rejected claims of scrapping Diamer-Bhasha’s 4,500MW generation component, calling the reports “fake news” and reaffirming long-term planning. Water Diplomacy: Deputy PM/Foreign Minister Ishaq Dar renewed Pakistan’s push for dialogue and international law to protect the Indus Waters Treaty. Regional Geopolitics: Leaders including Putin, Xi, Pezeshkian, Modi and Shehbaz will attend the SCO summit in Bishkek. Energy & Trade: Iran said US sanctions and blockade cut foreign trade by nearly 35% while vowing to resist pressure. Business & Industry: SECP moved to ease capital-market access with faster account opening; Pakistan also completed its semiconductor cluster framework with NED.

IMF Watch: An IMF mission is expected in Pakistan in September for the fourth EFF and third RSF reviews, with talks likely to cover Jan–Jun 2026 performance and tranche/financing steps. Energy & Fuel: Ogra cut petrol by 58 paisa and HSD by 17 paisa for Aug 29-31; RLNG prices also fell month-on-month, easing gas costs across SNGPL/SSGCL networks. Oil Refining Push: Petroleum minister met five refineries on Brownfield upgradation; agreements are expected early next month to unlock about $6bn and enable Euro-5 fuel production. Trade & Currency: Gwadar South/North Free Zones started direct RMB-to-PKR conversion for businesses, cutting FX losses; Pakistan’s July exports show the US, UK and China as top destinations. Capital Markets: SECP rolled out a unified digital investor onboarding framework to speed account opening (1-2 working days). Healthcare Accountability: PIMS fire that killed 14 infants triggered National Assembly action and ministerial accountability; Lahore also ramped up hospital safety audits. Local Development: Punjab is turning 485 villages into “model villages,” with infrastructure upgrades and services. Policy & Regulation: DRAP was ordered to revise drug pricing rules to curb unjustified increases while protecting essential medicine supply. Anti-Dumping: NTC kept anti-dumping duties on Chinese polyester DTY imports for five years.

Oil & Energy Security: Pakistan’s five refineries are set to sign early-September brownfield upgradation deals worth about $6bn, aiming for Euro-5 compliant, ultra-low sulphur fuel to cut import reliance. Power Crunch: Electricity shortfall has worsened, with load shedding extending across Punjab including Lahore as generation drops and gas supply concerns loom. Capital Markets Access: SECP has launched a faster digital onboarding framework, letting Sehl/Sahulat accounts be processed in one working day to boost retail participation. Governance & Compliance: Privatisation Commission prequalified 10 interested parties for FESCO’s privatisation, moving the deal to the next stage. Health Sector Accountability: After the PIMS maternity ward fire that killed 14 newborns, govt announced Rs5m compensation per family and lawmakers demanded a transparent, scientific probe. Transport Enforcement: Communications minister Abdul Aleem Khan vowed strict axle-load control with heavy fines and upgraded monitoring. Regional Defence: Pakistan signed a new defence protocol with Kuwait (Protocol Agreement-2026) on training, capacity building and border management, adding to Gulf military ties. IMF Watch: An IMF mission is expected next month for the fourth EFF review, likely including scrutiny of the sovereign wealth fund legal framework. Markets: PSX saw gains in early trade, with KSE-100 up around 446 points by midday. Geopolitics: US escalated economic pressure on Iran, while Pakistan and regional partners continue pushing for de-escalation and reopening of Hormuz talks.

Strait of Hormuz Diplomacy: Iran and Qatar held talks in Tehran as Washington’s “economic asphyxiation” campaign tightens pressure on oil flows, with Qatar pushing de-escalation and a framework for Hormuz between Iran and Oman. US-Iran Trade Pressure: Iran’s trade scramble is intensifying after the UAE suspended ties, while Pakistan and other regional partners weigh the risk of secondary sanctions under “Operation Economic Outcast.” Pakistan-Afghanistan Talks: Pakistan said it is open to state-level dialogue with Afghanistan, but only if Kabul takes tangible, verifiable action against militants using Afghan soil. SBP Reserves & Markets: SBP reported foreign reserves edging up to $17.1bn at the central bank and $22.59bn total, while the PSX closed nearly flat as profit-taking offset early gains. Energy Costs & Gas Pricing: Nepra may approve a Rs2.52/unit surcharge, with fuel-cost pressure likely to hit September bills, while the IMF is pushing to limit government power to cut gas prices to curb circular debt. Saudi Investment & Airport Privatisation: Asyad Group reiterated plans to expand in Pakistan and is exploring participation in the upcoming airport privatisation process. 5G & Power Demand: Telcos warned grid upgrades are needed for 5G, citing higher electricity demand and proposing “smart buildings” to prevent incidents like the PIMS fire. Public Sector Health Shock: Pakistan announced Rs5m compensation per family for PIMS newborn fire victims, as negligence concerns continue to mount.

Qatar Investment Push: Qatar’s Prince Sheikh Naif bin Eid Al Thani met Pakistan’s MoITT minister and signalled interest in investing across sectors, including motorways and highways, as both sides discussed joint ventures. SME Digital Growth: MoITT and Meta launched the free Small Business Growth Academy to train 1,000+ SMEs (women-led encouraged) on Facebook/Instagram/WhatsApp Business, digital ads and AI tools starting September. Karachi Power-Water Crisis: Protests over electricity and water shortages paralysed parts of Karachi, with traffic snarls around Manghopir Road, Lasbela Chowk and Korangi; K-Electric blamed bill defaults and power theft. Airport Privatisation Watch: Saudi Asyad Group said it is interested in Pakistan’s upcoming airport privatisation and may bid with international partners. PTA Consumer Rule: PTA ordered prepaid users get at least 180-day validity on every recharge, with expired balances automatically restored after the next top-up. Gas Sector Reform: Petroleum minister directed SSGCL to cut UFG, improve sustainability and revisit slab-based gas subsidies toward a single fair gas price, with targeted protection for vulnerable users. PSX Rebound: PSX KSE-100 rose after Eid reopening, gaining over 800 points midday as buying returned. US-Iran Economic Pressure: Pakistan reiterated it will keep bilateral trade with Iran under international law and said remarks on sanctions were “misconstrued,” amid reports of US “Operation Economic Outcast” and Hormuz talks. Tech & Telecom: Jazz expanded 5G to 1,000 live sites (10 cities) and targets 2,500 sites by year-end. Data Governance Debate: P@SHA flagged gaps in Pakistan’s draft data governance policy, warning unclear classification/localisation rules could hurt IT exporters. France Consulate Exit: France will permanently close its Karachi consulate after nearly five decades, saying ties continue via Islamabad. Cement Meets Power: Cement firms submitted EOIs to buy GEPCO, aiming to secure power and cut grid-related cost risks.

Hospital Fire Fallout: A fire in Islamabad’s PIMS maternity ward killed at least 14 newborns, with reports pointing to an air-conditioner blast and locked gates delaying rescue; PM Shehbaz removed the health secretary and an inquiry is underway. Urban Safety Gap: Karachi’s major government hospitals still show weak fire preparedness after the PIMS tragedy, including missing or non-functional alarms, limited extinguishers and outdated drills. Fuel Tax Protests: Jamaat-e-Islami in Lahore escalated protests against petroleum levies and fuel costs, warning of a nationwide strike and possible march to Islamabad if relief isn’t granted. Pakistan-Iran Mediation: Pakistan is pushing for a fresh 60-day US-Iran truce under the Islamabad MoU, after army chief Asim Munir’s Tehran talks and amid US “economic D-Day” sanctions threats. Currency Policy: SBP plans to phase out the Rs10 banknote and replace it with a coin, citing rising production costs; Senate also discussed cashless transition and remittance charges. Business & Trade: Saudi business delegation explored investment opportunities in Pakistan via SIFC, while Pakistan’s cement exports rose 9.58% in July and JS Bank reported strong profit growth.

Pakistan–EU Trade Pressure: The EU is flagging Pakistan-administered Kashmir as a key human-rights risk that could affect Islamabad’s privileged access under the GSP+ scheme, citing deaths and communications blackouts. Hospital Safety Fallout: A PIMS maternity ward fire in Islamabad killed at least 14 newborns, triggering political outrage and calls for a transparent, independent probe after the PM ordered action and a committee to identify responsibility. Iran Economic Pressure & Mediation: The US is leaning on economic pressure over immediate military strikes on Iran, while Pakistan’s army chief continues talks in Tehran as oil-shipping risks in the Strait of Hormuz persist and tanker incidents are reported. Pakistan–Saudi Business Push: A Saudi delegation visited SIFC to explore investment in power, petroleum, industries and infrastructure, as PM Shehbaz seeks to upgrade ties into a strategic economic partnership. Currency & Finance Watch: SBP plans to phase out the Rs10 note and introduce a coin, while Pakistan also seeks a US $10bn stabilisation facility amid ongoing currency-stability discussions. Aviation Connectivity: Air India and Bhutan’s Drukair launched an interline single-ticket arrangement, boosting South Asia travel links.

Civil Pay Raise: Pakistan’s federal government lifted the minimum gross salary for civil employees to Rs40,700 from July 1, 2026, with the gap paid as a taxable Special Allowance. Oil & Fuel Prices: OGRA notified petrol up by Rs1.12 and HSD by Rs1.11 for Aug 26-27, while oil prices eased for a second day as US pressure shifted toward sanctions and markets priced lower strike risk. Energy Costs & Savings: Power Division flagged major inefficiencies in imported coal procurement, issuing guidelines aimed at cutting losses of about Rs380m annually. Housing Push: Under the Wazir-e-Azam Apna Ghar programme, housing finance approvals nearly doubled to Rs279bn, with applications up 52% and disbursements rising sharply. Banking Results: JS Bank reported 105% PAT growth in 1HCY26, with deposits and non-remunerative mix strengthening. Local Governance: Sindh reviewed municipal service and tax collection issues to strengthen the local government system. Exports & Business Climate: Commerce Minister Jam Kamal Khan told the Senate exports need cheaper energy and financing, and pushed for a National Export Promotion Bureau and market diversification. Pakistan-Iran Mediation: Interior Minister Mohsin Naqvi said CDF Asim Munir and President Pezeshkian held “positive” talks in Tehran to restore the Islamabad MoU and manage US-Iran tensions. Currency/Policy: SBP is considering replacing the Rs10 note with a coin amid rising production costs. Markets: PSX closed up about 400 points as oil cooled on Iran hopes and banks led gains.