AGP Executive Report

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.

US Sanctions: The US Treasury sanctioned a Pakistani businessman, Wasim Pasha Tajammal, and his Cavalier Group entities over alleged third-party support for Iran’s defence procurement, in a move tied to “Operation Economic Outcast.” Markets & Inflation: Pakistan’s stocks slid as the KSE-100 fell 1,332 points; gold also dipped to Rs438,636 per tola after recent volatility, while September inflation eased to about 10.26% (per PSX-linked report). Policy Push: PM Shehbaz and Finance Minister Aurangzeb reiterated export-led growth, job creation and macro stability, pointing to rising investor participation and REIT momentum at PSX. Energy & Infrastructure: A CASA rail corridor study is set to be explored by Kazakhstan, Uzbekistan and the UAE toward Pakistan’s seaports, while a separate report flags hidden costs from transmission congestion in Pakistan’s power system. Regional Diplomacy: Pakistan said it is engaging in US-Iran mediation and remains in contact with Somalia over the MT Honour 25 crew repatriation. Security/Legal: Sindh extended the judicial commission probing Mir Raza’s death until Oct 15, and ISPR again rejected India’s claim about a retired soldier’s killing in IIOJK.

CPEC 2.0 Push: PM Shehbaz Sharif says Pakistan-China ties are moving into a new CPEC phase focused on industrialisation, special economic zones, IT/AI, agriculture and mining. Energy Costs Watch: OGRA hiked LPG prices by Rs20.68/kg for October; petrol cut by 14 paisa and HSD by Rs1.89, while LNG rules may be loosened so private firms can directly import. Tax & Compliance: FBR busted Rs9.41bn wealth-statement fraud and registered cases; income tax returns jumped 45% YoY to 5.77m by Sept 30, with filing deadline extended to Oct 15. Trade & Industry Pressure: APTMA warns textiles need a competitive business environment, especially on energy tariffs and taxation; PRGMEA and PSMA elected new leaderships for 2026-28. Business Climate Signals: KCCI elected Talat Mehmood as president; KCCI and FoP-USA signed an MoU to boost Pakistan-US trade. Power Sector Moves: LESCO commissioned two 132kV grid stations to ease transmission pressure. Corporate Deal: AkzoNobel completed sale of AkzoNobel Pakistan to Packages Group for about €50m. Regional Diplomacy: Pakistan and India struck a cordial SCO note in Islamabad despite recent UNGA tensions.

IMF & Markets: Pakistan’s KSE-100 rose 368 points to close at 169,969 as investors bet on progress in IMF talks and a local-currency bond market action plan, though gains faded after early momentum. Energy Policy: Govt is considering letting private firms directly import LNG and expand auctions of unused terminal capacity after Qatar-linked supply disruptions, aiming to ease power shortages without extra state strain. Tax & Compliance: FBR moved to seal businesses not connected to electronic monitoring systems under amended Sales Tax Rules, while the income tax return deadline ends today with proposed higher late-filing penalties. Corporate Moves: IGI Holdings completed its 98.31% acquisition of Akzo Nobel Pakistan for Rs15.25bn, signaling consolidation in paints and coatings. Trade & Industry: Leather exports climbed 13.45% to $118.37m in July-August 2026-27; dairy farmers in Karachi demand a Rs60/litre hike, warning of Rs300 retail if authorities delay. Geopolitics & Security: US sanctions target Iran weapons procurement networks with some entities listed in Pakistan; India’s Gujarat ATS and Coast Guard seized 526kg drugs worth Rs3,000 crore from an Iranian boat with five Pakistani nationals held. Governance Debate: Info Minister Atta Tarar questioned KP CM Afridi’s ability to lead a long march amid terrorism concerns, while PPP said it will offer constitutional recommendations on governor’s rule in KP.

IMF Talks: Finance Minister Aurangzeb kicked off talks with the IMF mission for the fourth EFF and third RSF reviews, with hopes of unlocking about $1.2bn by end-Oct/early Nov, though waivers may be needed for structural slippages. Markets & Debt: PM Shehbaz became the first Pakistani premier to open trading at the London Stock Exchange and inaugurated a landmark $3bn dual-tranche Eurobond, while also meeting global banks and asset managers in London to spur investment. Fuel Prices: Pakistan cut petrol by Rs1.49 to Rs387.54/litre and HSD by Rs2.73 to Rs402.24/litre for Sept 30. Trade & Industry: Cabinet approved modalities to export 200,000MT surplus sugar and set up a monitoring committee; meanwhile, cotton ginners and textiles urged urgent relief amid a projected cotton shortfall. Energy Reform: Punjab is mulling participation in Pakistan’s first 400MW electricity wheeling auction to push open access and competition. Digital Trade: Pakistan Customs integrated with Hong Kong’s ValidAP via Pakistan Single Window to speed up trusted verification of trade documents. Governance & Courts: IHC issued notices on NAB’s plea in the fake bank accounts case; PAC directed a performance audit of customs declaration/classification processes. Security & Politics: Senate grilled police over arbitrary interprovincial travel checks; PTI kept its Oct 4 protest march call intact despite calls to postpone.