AGP Executive Report

Afghan Cross-Border Strikes: Pakistan carried out overnight air and ground strikes in eastern Afghanistan, targeting militants in Paktia, Paktika and Kunar, with officials claiming 25 militants killed and operations also hitting Jamaat-ul-Ahrar. Diplomatic Fallout: The Foreign Office summoned the Afghan chargé d’affaires over a Karachi Rangers camp attack, calling it linked to Afghan nationals; Pakistan also issued a “strong” demarche. Security & Migration Crackdown: Pakistan ordered immediate arrest of Afghan nationals without valid visas and accelerated deportations, with start of arrests from July 10—drawing criticism from rights groups. Punjab Law Row: Punjab Speaker Malik Muhammad Ahmad Khan distanced himself from the proposed Habitual Offenders Bill, saying he wasn’t briefed and warning of strict action; critics say it could enable rights violations. PSX & Markets: PSX traded volatile as investors watched the fragile US-Iran ceasefire and oil prices; KSE-100 slipped slightly by midday. Corporate/Business: SG Power shifted its principal business to pharmaceuticals allied after SECP registration; BAT plans major global job cuts and outsourcing, including roles in Pakistan. Water & Economy: Pakistan ranked 14th among water-scarce countries as Indus river levels rose, prompting safety alerts. Cricket Finance: PCB approved PSL autonomy and a higher domestic cricket budget (Rs4bn) plus higher Quaid-e-Azam Trophy match fees.

Sindh Budget Defense: Sindh CM Murad Ali Shah told the Sindh Assembly that current expenditure rose just 7.4%, the lowest among provinces, while Rs1.263trn is earmarked for salaries and austerity cuts exceed Rs62bn; he also outlined a Rs720bn ADP with Rs206bn for Karachi. Karachi Civic Spending: Karachi Mayor Murtaza Wahab presented KMC’s FY27 budget of Rs63.95bn focused on development and municipal services, while KMC also flagged a targeted Rs9bn district ADP outlay for infrastructure and public space rehabilitation. Fuel Price Pressure: ANP demanded immediate petrol/diesel relief as global crude falls, and a fresh debate continues over government pricing decisions. Petroleum Imports Plan: Pakistan is considering buying cheaper Iranian oil and gas after temporary easing of US sanctions, with potential savings cited by the petroleum minister. Trade Facilitation: FBR notified Taftan railway station as a land customs station to speed Iran-Pakistan rail trade and curb informal routes. MSME Push: HCSTSI and SMEDA marked International MSME Day, stressing SMEs’ role in jobs, exports and market access. Digital Identity: PTA warned SIMs linked to expired/cancelled CNICs may be blocked unless users update documents. Security & Business: PPP and Punjab leadership praised security forces after attacks on Rangers personnel/camps in Karachi, while Lahore kept churches on high alert during Christian services.

Pharma Track-and-Trace: DRAP has set Oct 9 as the deadline for a mandatory 2D barcode and serialization system on all medicine packs, with DRAP supervising nationwide rollout to help curb fake and substandard drugs. Fuel Relief Debate: Petroleum Minister Ali Pervaiz Malik says Pakistan is exploring cheaper oil and gas imports from Iran after restrictions ease, and insists any global price drop will be passed to consumers, rejecting claims the government is favouring any sector. Pak-Iran Trade Boost: FBR has notified Taftan railway station as a land customs facility to streamline rail-based import/export clearance and cut costs, following coordination between Pakistani and Iranian rail chiefs. MSME Push: The government reiterated MSMEs are the backbone of the economy, citing their large share in GDP, exports and jobs, and linking future competitiveness to AI and digital transformation. Urban Services: Punjab’s PMDFC MD says World Bank-backed inclusive cities work is expanding water and sewerage systems at scale to improve sanitation and public health. Business Climate Watch: Karachi’s KCCI warns the continued sealing/occupation of the historic Cotton Exchange building is disrupting hundreds of cotton-linked businesses and hurting exporter confidence. Markets: PSX closed the week up 0.36% as easing geopolitical tensions and the FY27 budget improved sentiment. Security & Governance: Sindh Assembly offered prayers for Rangers personnel killed in Karachi, while lawmakers in the merged tribal districts resist new taxation measures amid fears for small traders and recovery.

Karachi Security Shock: A suicide attacker rammed an explosives-laden vehicle into the Pakistan Rangers’ Karachi HQ area near University Road, triggering hours of gunfire; at least three Rangers personnel were reported killed and militants were also believed dead, with the group Jamaat-ul-Ahrar claiming responsibility. Sindh Law & Order: Sindh Home Minister Zia-ul-Hasan Lanjar said crime has fallen 40% and terrorism incidents 80%, with Karachi reaching its lowest danger levels in years. Public Finance Watch: Finance Adviser Khurram Schehzad said central government debt growth eased to 5% in FY26, arguing sustainability metrics like debt-to-GDP matter more than headline rupee totals. Tax & Banking Timing: SBP directed banks to keep selected branches open late from June 27-30 to help taxpayers pay duties and taxes via digital and OTC channels. Digital Economy & Crypto: Pakistan urged developing economies to shape global tokenized-finance standards at Zurich’s Point Zero Forum, pushing a “Pakistan-first” regulatory approach. Energy & Trade: PM Shehbaz stressed secure sea lanes as vital for global trade and said maritime stability remains a priority. Markets & Costs: Proposed Finance Bill changes could cut customs duty on up to 800cc imports (notably 660cc) from 50% to 30%, potentially lowering prices for popular compact cars. Environment Enforcement: Karachi’s waste regulator empowered field officers to fine violators Rs50,000-Rs500,000 and push training-linked trade license rules.

SCO Business: Pakistan will assume the Shanghai Cooperation Organization (SCO) Business Council chairmanship in 2027, with FPCCI set to represent the country and push trade facilitation and B2B connectivity across member states. Petroleum Pricing: Petroleum Minister Ali Pervaiz Malik says a transparent petroleum pricing framework is expected soon to ease consumer burden, noting petrol has been cut by Rs155/litre and diesel by Rs200/litre so far. Tax Drive: FBR extended tax office working hours from June 27-30, keeping offices open late (until 8pm on June 29 and midnight on June 30) and on Sunday to meet fiscal-year collection targets. Public Finance: Finance adviser Khurram Schehzad says central government debt growth slowed to 5% in FY26, citing improved debt sustainability and lower external debt risk. Digital Payments: SBP reports digital payments in Pakistan surged, with 78% of transactions now on mobile banking apps and Rs68trn recorded in Q1CY26. Trade Corridors: WFP says Iran has become Afghanistan’s main trade route after Pakistan border disruptions, but longer and costlier routes are raising food and transport costs. Maritime Security: PM Shehbaz Sharif stressed free passage at sea as a global necessity, linking maritime security to supply chains and economic stability.

Budget Watch: Pakistan’s Finance Bill 2026-27 has been approved and will take effect July 1, with the government pitching an export-led, growth-focused agenda while shifting toward widening the tax base. Audit Shock: The Auditor General flags widespread financial irregularities across federal bodies, including Rs75bn questioned under a development programme and Rs1.92tr in unrecovered foreign loan liabilities, raising fresh governance concerns. SBP Revenue Outlook: State Bank profit transfers to the federal government are projected to fall by nearly 41% in FY27 as interest rates ease, tightening fiscal room. Oil Pricing Row: Oil Marketing Companies and refineries accuse OGRA of miscalculations in fortnightly fuel pricing, alleging excessive cuts in petrol and diesel. Digital Payments Boom: SBP data shows 3.4bn digital payments worth Rs68trn in Q1 2026, with digital channels now dominating retail transactions. Transport & Trade: Heavy vehicle imports hit a record $262.4m in FY25-26 (first 11 months), while SIFC-backed M-13 motorway aims to cut Lahore–Rawalpindi travel by about an hour. Energy Transition: Distributed solar is pushing up electricity demand and Pakistan’s solar imports surged in recent years, underscoring both momentum and policy risks. Regional Diplomacy: Pakistan facilitated US-Iran maritime de-escalation steps, including repatriation of 22 Iranian tanker crew members via Karachi.

Finance Bill Assent: President Zardari has given assent to the Finance Bill 2026-27, formally activating the federal budget from July 1 after parliament’s approval. Audit & Governance: Pakistan’s Auditor General flags billions of rupees in financial irregularities and weak oversight across multiple federal bodies, including development spending concerns. Digital Payments & Banking: SBP data points to digital banking momentum, with transactions hitting Rs68trn in Q1CY26 and mobile/digital channels driving growth. Energy & Power Reform: Türkiye will support Pakistan’s electricity privatization and power-sector reforms via new cooperation agreements, while Pakistan also pushes solar expansion and energy infrastructure projects. Trade & Tariffs: Pakistan-US maritime cooperation is discussed, and broader trade talks remain in focus as tariff frameworks and market access shape outcomes. Security & Public Order: Punjab rolls out a digital monitoring plan for Muharram, deploying large police numbers and QR-linked oversight of imambargahs. Currency Watch: PKR and gold rates are steady/unchanged in today’s updates, with the dollar around Rs278.95-279.40. Accountability: NAB arrests an alleged front man in the Kohistan scandal, probing suspicious transactions and property purchases.

Finance Act 2026-27: President Asif Ali Zardari signed the Finance Act 2026-27, formally activating Pakistan’s Rs18trn-plus federal budget from July 1, including a 7% rise in salaries and pensions and new tax/customs measures. Energy Infrastructure: SIFC approved a 435-km White Oil pipeline (Machike–Thallian–Tarru Jabba) to cut fuel logistics costs and improve energy security. Power Sector Cooperation: Pakistan and Türkiye signed three MoUs in Istanbul to boost institutional and technical collaboration across power markets, transmission, distribution, digitalisation and capacity building. Urban Sustainability: Karachi’s KMC allocated Rs750m for a mega solarisation drive for streets and municipal buildings to reduce load-shedding dependence and municipal costs. Digital Payments: SBP reported digital payments hit 92% of retail transactions in Q3 FY25-26, with 3.7bn transactions worth Rs168.8trn. Public Health Diplomacy: Pakistan pushed for stronger UN action on hepatitis C, citing a PM programme with $250m for free screening, diagnosis and treatment. Governance & Accountability: Auditor General flagged Rs3.41bn irregularities in health-related departments, including audit refusals by the Pakistan Nursing and Midwifery Council. Trade & Industry: Customs duty cuts on imported hybrids were announced, with hybrid buyers seeing relief on some components even as higher FED/SED may apply to larger engines.

US-Iran Mediation & Diplomacy: Pakistan’s DPM/Foreign Minister Ishaq Dar said the world now recognises Pakistan as a “peacemaker” after brokering US-Iran talks, while Pakistan also backed GCC-led efforts for restoring the Strait of Hormuz status quo and said technical-level US-Iran talks are set to resume next week. EU/UK Counterterror Stance: EU and UK envoys reiterated that TTP is a terrorist group with safe havens in Afghanistan and affirmed Pakistan’s right to self-defence. Markets & Finance: PSX rebounded with bullish momentum, gaining 1,878 points; Chinese investors expressed confidence in SECP reforms and PSX market infrastructure. SME Push: SBP and LCCI agreed to work jointly for SME growth and women’s financial inclusion. Budget & Governance: Finance minister Aurangzeb announced a six-salary bonus for officials who handled budget duties; Punjab’s finance minister defended the provincial budget amid opposition criticism. Trade & Agriculture: Pakistan Rice Festival in the Netherlands drew 100+ importers, boosting hopes for higher agri exports. Industry Updates: Pak Suzuki removed three dealerships from its authorised network. FX Watch: Iranian rial surged in Pakistan’s open market as investors bet on improved Iran-US ties. Labour Mobility: Punjab sent the first batch of 135 skilled youths to Saudi Arabia under Parwaaz Card. Weather: Monsoon rains are expected to start in Punjab while Balochistan stays under heatwave conditions.

US-Iran Talks Resume Next Week: Pakistan’s Foreign Ministry says technical talks between the US and Iran will restart next week with Pakistani attendance in Switzerland, after Tuesday’s conclusion of the latest round and plans for working groups on sanctions, nuclear, reconstruction and economic development. Airspace & Aviation: Air India’s Delhi-Amritsar AI479 briefly infringed Pakistani airspace during a go-around; Pakistan ordered a probe after the incident. Trade & Borders: FBR notified 11.75 acres at Taftan Railway Station as a Land Customs Station to streamline Pakistan-Iran trade, while Customs enforcement seized Rs77m+ in smuggled goods and non-custom-paid vehicles. Power Sector Support: ECC approved Rs52bn equity for DISCOs via CPPA-G and re-appropriated funds for tariff subsidies, alongside other grants and incentives. Markets: PSX rebounded strongly, with KSE-100 up 1.06% on buying linked to budget relief for exporters and softer oil prices. Maritime Cooperation: Pakistan and the US discussed expanding maritime investment, port development and the blue economy, with a joint working group proposed. Telecom Rights: A PM-formed committee on the telecom amendment bill says owner consent will remain mandatory for access to private property, aiming to clarify right-of-way provisions. Islamabad H-9 Fire: A major blaze at H-9 Sunday Bazaar destroyed hundreds of stalls, with traders alleging poor response and possible conspiracy. Capital Markets Oversight: SECP and NAB agreed to strengthen action against illegal deposit schemes, while Chinese investors welcomed SECP steps to boost PSX infrastructure and new products like cross-border ETFs.

US–Iran Peace Track: US and Iran remain split over whether Tehran will allow UN nuclear inspections, even as Pakistan-mediated technical talks continue in Switzerland and a 60-day roadmap targets a final war-ending deal. Energy & Trade: Pakistan’s defence minister says Iran gas and oil imports via the long-delayed pipeline are back on the table, while Qatar expects LNG output to return to normal within weeks after strikes hit Ras Laffan. Oil Market Mechanics: Pakistan will keep the weekly fuel pricing mechanism, with officials linking petrol/diesel formulas to import premiums and citing smuggling and delayed Ogra payments as industry pain points. Pakistan–Iran Diplomacy: Interior ministers vow continued cooperation on regional peace, and Iran’s president reiterates missiles are not up for negotiation under the MoU. Tax & Compliance: Punjab Revenue Authority seals 15 developers’ offices and targets restaurants over sales-tax discrepancies; PTA fines Zong Rs116.7m for unauthorized SIM issuance. Public Finance Scrutiny: Auditor General flags major federal budget irregularities, while BISP audits point to Rs25bn+ in ineligible payments. Business & Infrastructure: SIFC clears a 435-km white-oil pipeline corridor; OGDCL starts production from Sahito-1, adding gas to the grid. Local Economy: Sindh shifts salary and pension payments to earlier monthly dates, and Islamabad’s H-9 Sunday Bazaar fire destroys dozens of shops.

US-Iran Mediation: Iran and the US are still sparring over nuclear inspections as talks continue, with the Strait of Hormuz moving toward reopening for commercial shipping and a plan to evacuate 11,000 stranded seafarers. Pakistan-Iran Diplomacy: Iranian President Masoud Pezeshkian arrived in Islamabad for high-level talks with President Zardari and PM Shehbaz, underscoring Pakistan’s role in the Islamabad MoU and pushing deeper trade, energy and border security cooperation. Frozen Assets Watch: Iran’s central bank estimates frozen assets at about $24bn, while officials warn media figures may be inflated—key for any humanitarian and economic relief. Markets: PSX saw sharp swings, with the KSE-100 closing 778 points lower after an early surge. Energy & Prices: LPG prices reportedly jumped beyond the official cap, while new gas production began from wells in Sindh. Finance Bill 2026-27: NA passed the Finance Bill after rejecting opposition amendments, including revised salaried income tax slabs effective July 1 and changes to property and mobile-phone taxation. Corporate/Ports: Karachi Gateway Terminal plans up to $100m more investment to expand capacity and cut freight costs, aiming to turn Iran-war cargo rerouting into longer-term gains. Local Business Disruption: A major fire gutted Islamabad’s H-9 Sunday Bazaar, destroying 70+ shops.

Iran-US peace push & Pakistan’s role: Iranian President Masoud Pezeshkian left Tehran for a one-day visit to Islamabad, saying the trip aims to ensure full implementation of the Iran-US memorandum and praising Pakistan’s “indispensable” mediation; Diplomatic process update: Iran’s foreign ministry said a four-way Switzerland meeting with Iran, the US, Pakistan and Qatar failed to reconvene after US threats, with talks continuing only via mediators; Markets: Asian and European stocks slid after a Wall Street tech sell-off, while oil eased as investors weighed progress in US-Iran negotiations; UN on AI costs: The UN urged AI firms to disclose carbon, water and land footprints and shift data centres toward clean power; Energy & gas: Mari Energies started supplying up to 30 MMscfd from Shams-1 to SNGPL during extended well testing; Policy & digitisation: Pakistan will end cash passport fee payments from July 1, moving to QR-based digital payments and e-passports; Finance & tax: NA passed the FY2026-27 budget amid opposition walkout, and Pakistan’s Finance Bill proposals include revised income tax slabs effective July 1; Punjab revenue crackdown: Punjab plans CCTV at marriage halls and large food chains and pushes digital payments to curb tax evasion; Corporate/aviation: FBR issued a Rs2.217bn recovery notice to PIA for delayed salary withholding tax deposits.

US-Iran Deal & Pakistan Mediation: Pakistan’s defence minister Khawaja Asif said the Islamabad MoU is a major blow to Israel’s “Zionist regime,” with a 60-day roadmap toward a final settlement and phased steps on sanctions and Strait of Hormuz shipping. Energy & Markets: US Treasury issued a 60-day waiver allowing Iranian oil sales as talks continue; Asian chemical stocks were mixed and oil eased on diplomacy hopes. Fuel Policy: Pakistan ended the fuel subsidy scheme for motorcyclists, small farmers and public/goods transport after global oil prices fell and benefits reached consumers. Qatar LNG Disaster: A technical blast at Qatar’s Ras Laffan gas complex killed 13 workers (including Pakistani nationals) and injured dozens; Qatar said exports were unaffected. Pakistan Economy Watch: PSX closed lower after a volatile session; gold prices in Pakistan rose amid uncertainty. Bilateral Diplomacy: Iran’s President Masoud Pezeshkian is set for a state visit to Pakistan, with talks expected on trade, energy and regional connectivity. Regional Security: Pakistan reiterated threats over Indus water disputes with India as tensions simmer.

US-Iran Diplomacy: Qatar and Pakistan mediators say the US and Iran agreed on a roadmap to a final deal within 60 days after first-round talks in Switzerland, including a direct communications line to keep the Strait of Hormuz safe and a Lebanon “de-confliction cell” to curb fighting. Energy & Markets: Oil prices swung on Hormuz headlines but eased as negotiations progressed; global risk sentiment improved, lifting regional equities. Indus Waters Flashpoint: Pakistan’s Defence Minister Khawaja Asif escalated rhetoric, warning he would consider “going to war” if water security is threatened after India kept the Indus Waters Treaty suspended. Transport Relief in Karachi: Transporters ended a strike after Karachi administration accepted key demands, including a two-month extension on biometric verification for vehicle transfers. Corporate Expansion: Loads Ltd is exploring a copper-sector JV with China’s Anhui New Material Technology (Xinhuida), including trading, processing, manufacturing and possible acquisitions. Mobile Phone Costs: Pakistan lawmakers discussed easing PTA phone registration taxes via installment options, while clarifying that duties have not been fully abolished. Politics in Gilgit-Baltistan: PPP nominated Amjad Hussain as its CM candidate after winning the most seats, with coalition talks expected with PML-N.

US-Iran Diplomacy: Egypt, Pakistan, Saudi Arabia and Türkiye backed the US-Iran “Islamabad MoU” as a de-escalation step, urging swift talks on a long-term, verifiable settlement that protects Gulf and Levant security and keeps energy and maritime routes stable. Switzerland Talks: In Bürgenstock, US Vice-President JD Vance pressed Iran to “turn over a new leaf” while Trump warned of new strikes if Hezbollah or Hormuz interference continues; Pakistan and Qatar mediators were in the room as technical work began. Pakistan’s Role: PM Shehbaz and Army Chief Asim Munir met Iran’s delegation in Switzerland to monitor US commitments under the MoU, with Swiss officials praising Pakistan’s mediation. Parliament & Energy: The National Assembly approved Rs661.27bn in energy-sector grants for FY27 after rejecting opposition cut motions. Punjab Governance: Body cameras in public hospitals face privacy, cost and rollout scrutiny. Trade & Transport: PIA raised free baggage allowances on Islamabad-Beijing routes and resumed flights from July 3; Karachi’s traffic enforcement claims a drop in fatalities. Agriculture & Exports: Mango exports are expected to fall at least 30% as Middle East conflict hits demand and shipping costs. Regional Mediation: Kazakhstan said it can mediate between Afghanistan and Pakistan if formally requested.