AGP Executive Report

Independence Day & Economy: SBP Governor Jamil Ahmed said Pakistan’s economy is moving in the right direction, citing 3.6% growth in FY26, rising remittances and improving FX reserves, while urging unity and a stronger, law-based financial system. Fiscal & Energy Revenue: Pakistan’s petroleum levy collection hit a record Rs1.567tr in FY2025-26, helping narrow the fiscal deficit to 2.6% of GDP (lowest in 22 years), as defence and civil spending rose. Trade & Customs: Pakistan and Hong Kong signed a customs cooperation arrangement to share information and support enforcement against smuggling and illicit trade. Regional Diplomacy: DPM/FM Ishaq Dar met US Chargé d’Affaires Natalie Baker and the UK High Commissioner, stressing Islamabad MoU implementation “in letter and spirit” and dialogue for peace. Geopolitics & Security: Turkey’s FM accused Greece, Cyprus and Israel of a Mediterranean security alignment aimed at containing Turkey, as Ankara defends its emerging defence cooperation with Saudi Arabia and Pakistan. Water Tensions: PM Shehbaz Sharif reiterated “every single drop” of Indus water is a red line, warning India of direct response if the treaty is not respected. Business Pulse: Transporters called off a nationwide strike after talks with the government, clearing the way for freight operations to resume.

Sovereign Credit & Fiscal Discipline: S&P says Pakistan’s rating could see further upgrades if fiscal consolidation holds, citing a fiscal deficit that slid to a 22-year low of 2.6% of GDP in FY26 and improved external stability. Digital Finance & Tokenisation: Finance Division is exploring digital assets and tokenisation for real estate and other investment assets, while the Finance Ministry also met the Pakistan Digital Authority on digital finance and easier access to funding. Power Sector Innovation: The Power Division launched a National Power Sector Innovation Programme with an Innovation Hub platform and plans to allocate over Rs1bn in three years for pilots and scaling solutions. Tax & Compliance Tech: FBR rolled out the Tax Year 2026 income tax return form, but taxpayers report multiple bugs and filing glitches. KEPZ GST Dispute: Pakistan’s Federal Constitutional Court granted interim relief to KEPZ export units in a sales tax on electricity dispute. Markets: PSX closed slightly lower as KSE-100 slipped 206 points to 180,104. Trade Links: Pakistan and Kyrgyzstan agreed to set up a Joint Business Council to boost B2B trade, while Pakistan and Norway pushed deeper cooperation across trade, IT, maritime and defence. Independence Day Economy Theme: President Zardari and PM Shehbaz urged economic strengthening and stability, with Shehbaz warning India that Pakistan’s water resources are a “red line.”

Pakistan-Norway Defence & Iran Mediation: Norway’s FM Espen Barth Eide met CDF/CAS Asim Munir at GHQ and praised Pakistan’s “professional” role in promoting regional peace, with talks also covering Iran-US diplomacy, Strait of Hormuz security, trade, climate and skilled migration. Digital Finance Push: Finance Minister Aurangzeb met Pakistan Digital Authority chair Dr Sohail Munir to push an enabling framework for electronic transactions, easier onboarding, stronger bank–capital market data-sharing and interoperability. Electricity Cost Risk: NEPRA may raise power tariffs by Rs1.34 per unit for three months under quarterly adjustment, with sources warning of about Rs34bn extra burden on consumers. Karachi Water Charges Up: Sindh approved a 7.05% hike in KWSC water and sewerage tariffs (effective from July 1). Legal Ruling on Cheques: Lahore High Court upheld a case registration over a cheque issued from a frozen account, treating it as potential fraud. Scholarships to UK: 33 Pakistani scholars selected for fully funded Chevening/Commonwealth postgraduate studies in fields like health, governance, business and diplomacy. Mountaineering Tragedy: Body of Pakistani climber Sohail Sakhi recovered from Broad Peak and moved to base camp as search continues for others. AI in Customer Service: AssistRing launched ARIS, an in-house AI suite aimed at full-coverage quality assurance and support automation.

Balochistan Rights Debate: A fresh commentary argues Islamabad can’t square its Punjabi-dominated politics with Balochistan’s distinct identity and history, warning the federal approach is worsening an “intractable” problem. Overseas Jobs Push: More than 317,000 Pakistanis have left for work abroad in Jan–Jun 2026, with Saudi Arabia the top destination, as unemployment and costs drive migration. Power Tariff Shock: DISCOs are seeking to recover about Rs34bn from consumers via Q2FY26 capacity charges, raising pressure on NEPRA as industry warns of affordability limits. Market Mood: PSX closed up about 465 points as investors returned, with oil and gas and autos among key gainers amid hopes of easing regional tensions. Auto Sector Export Plan: Govt is calling for a shift to export-led automotive production and unveiled a 150-acre Port Qasim automotive processing zone aimed at import-refurbish-export, targeting ~$200m annual FX surplus. Transport Strike Hits Exports: Transporters’ strike has stranded around $500m in export containers, while textile exporters warn of missed schedules and demurrage risks. Digital Courts: The Supreme Court has started consultations with bar bodies to build a standardised national e-filing framework. Youth Employment Policy: PM Shehbaz launched Pakistan’s first National Youth Employment Policy, including a 35% women labour quota and support for youth start-ups. Pakistan-Iran Diplomacy: Ishaq Dar condemned the Houthi attack that killed three Pakistanis and Iran’s envoy meetings signal continued push for dialogue.

Pakistan–Belarus Trade Push: Pakistan and Belarus agreed to expand economic and trade cooperation and explore new investment opportunities at the 9th Joint Ministerial Commission in Islamabad, with focus on agriculture, industry, energy, technology, skills, digital economy and SMEs, including a feasibility study and a preferential trade regime. Health & Pharma Pressure: Health minister Mustafa Kamal said about 1,300 children die daily from malnutrition, while Pakistan’s pharma exports rose 38% last year; DRAP is 85% digitised and a new system is planned from Oct 9, as only 22 drug inspectors serve a population of nearly 250m. Bank Holiday Calendar: State Bank of Pakistan said banks, financial institutions, SBP and the stock exchange will stay closed Aug 14–16 for Independence Day and weekend holidays, with ATMs and online services operating. Kashmir Polls Under Strain: Pakistan-administered Kashmir local elections look set to favour PML-N, but voting delays and deadly unrest have disrupted several constituencies. Telecom Compliance Crackdown: SECP launched a Sharia-compliant brokerage segment, while PTA penalised Zong (CMPak) Rs77.8m over SIM geo-fencing/BVS device rule breaches. Regional Security Watch: Reports say US and Iran have agreed in principle to extend a 60-day ceasefire under the Islamabad MoU beyond Aug 17, though Iran disputes the basis for extension; shipping attacks in the Red Sea/Bab el-Mandeb continue to rattle oil markets.

US-Iran & oil markets: Pakistan’s defence minister Khawaja Asif said the US and Iran are “close to some sort of arrangement” on reopening the Strait of Hormuz, even as the US fired on a Panama-flagged ship trying to breach the blockade and Iran keeps conditions for reopening; oil stayed firm (Brent near $89) and PSX slid 1,464 points on oil jitters and fading deal hopes. Regional security: Saudi Arabia’s cabinet praised the Makkah summit outcome with Türkiye and Pakistan, calling it a step toward a long-term defence partnership and stressing maritime security for Hormuz and Bab al-Mandeb. Tax & trade support: FBR cut exporters’ tax rate to 1.25% and announced a Rs361bn relief package; ECC also approved SBP export finance schemes up to PKR1.85tn. Capital markets: SECP approved 10 IPOs in H1 2026 raising over Rs20bn, with a push to grow the investor base via digital onboarding. SME digitisation: MoITT and Meta launched the Small Business Growth Academy for 1,000+ SMEs, including women-led firms, to build AI and digital skills. Food & exports: Seafood exports to China rose 24% in 2025 to about $255m, with calls for cold-chain and quality upgrades. Economy watch: SBP debt bulletin put federal government debt at Rs83.6tn by June 2026. Governance & compliance: PM Shehbaz ordered a third-party audit of customs bonded warehouses for the last three years, warning of legal action for irregularities.

IMF & Macroeconomy: Pakistan is eyeing a $1.2bn IMF tranche next month as talks continue, with sources flagging circular debt as a key risk for the government’s reform push. Markets & FX: PSX slid again, with KSE-100 down about 1,464 points on oil-price jitters and fading hopes of a US-Iran deal; meanwhile the rupee edged up to around 277.67 per dollar. Energy & Fuel: Petroleum dealers warned of a possible nationwide petrol pump shutdown from Aug 15 unless demands are met, while Hormuz-linked disruptions also kept pressure on prices and sentiment. Trade & Finance Policy: SBP moved to tighten monitoring of Rs88bn export subsidies, and new rules aim to curb misuse while supporting exporters. Governance & Tax: PM Shehbaz ordered a three-year third-party audit of customs-bonded warehouses, with strict action against irregularities. Business & Digital: MoITT and Meta launched a Small Business Growth Academy for 1,000+ SMEs to adopt AI and digital tools. Education: Cambridge announced June 2026 AS/A-level results for Pakistan, with IGCSE and O-level results due Aug 18. Transport: Lahore Metro Bus shutdown threats were averted after talks between VEDA and the Punjab Mass Transit Authority. Security/Shipping: UKMTO reported an incident involving a container ship and military forces in the Gulf of Oman near Pakistan, amid heightened maritime risk.

Pakistan–US Talks: Finance Minister Muhammad Aurangzeb met US Chargé d’Affaires Natalie Baker, pushing for more US investment and financing in ports/logistics, energy, telecom, digital tech and AI as reciprocal trade talks move ahead. SBP & Exports: SBP is set to tighten export subsidy rules with a performance-linked, fiscally sustainable export facilitation framework, while the government also plans stricter controls to prevent misuse. Tax Compliance Crackdowns: Punjab Revenue Authority launched a province-wide crackdown on restaurants, hotels and marriage halls, requiring digitally monitored invoices via e-IMS and QR-verified tax invoices; FBR also proposes mandatory physical inspection for bidders in customs auctions. Power Sector Reform: Cabinet Committee on Privatisation will approve the Scheme of Arrangement for the first batch of Discos (FESCO, GEPCO, IESCO) as investor interest builds. SME Financing Push: Aurangzeb urged banks to accelerate the PM’s Access to Finance plan, citing progress under Apna Ghar and wholesale financing frameworks. Remittances: July remittances rose 13% to about $3.6bn, supporting FY27 inflow expectations. Banking Results: Faysal Bank reported strong H1 profits and dividends, while Meezan Bank surpassed Rs3bn in GHTA housing disbursements. Geopolitics & Diplomacy: Dar launched a diplomatic push after the Makkah Joint Defence Agreement, while PM Shehbaz said the pact is “absolutely not aggression.” Local Governance: ECP reached out to Punjab to form a consultative committee for setting local government election dates.

Geopolitics & Defence: Pakistan, Saudi Arabia and Türkiye signed the “Makkah Joint Defence Agreement”, a NATO-style pact treating an attack on one as an attack on all—while Pakistan’s FM Ishaq Dar reiterated it is “defensive” and not aimed at any country; the move is already drawing regional debate, including concerns in India and reactions from Iran and others. Middle East Energy Risk: Two days after the pact, the Houthis claimed a drone strike on Saudi Aramco’s Jizan refinery; Saudi said a fire was extinguished and no injuries were reported. Telecom & Fintech: PTCL clarified that its proposed acquisition of a majority stake has no final target identified yet, amid speculation about a digital wallet; separately, the Ufone-Telenor merger and PTCL-Ufone restructuring are reshaping competition rules. Public Transport: Lahore Metrobus operations may halt from Aug 11 due to unresolved fuel supply issues, putting hundreds of thousands of daily commuters at risk. Economy & Finance: Pakistan’s remittances rose to $3.63bn in July (up 13% YoY), with Saudi Arabia the top source; BankIslami Pakistan appointed Shahid Hussain Jatoi as chairman, while Punjab approved up to PKR 30bn equity injection into Bank of Punjab. Markets: Gold prices in Pakistan jumped again, up Rs800 per tola to Rs457,336. Crime & Justice: Karachi businessman Mir Raza Ali’s case widened after forensic findings reported acid traces in his stomach/lungs and on belongings; Sindh deferred a judicial commission after his family backed a new police team. Trade & Industry: Textile exporters warned a goods transport strike could hit cotton supply and export shipments.

Makkah Defence Pact: Deputy PM Ishaq Dar says Pakistan-Saudi-Turkiye’s “Makkah Joint Defence Agreement” is purely defensive, not targeted at any country, and open to others—while the federal cabinet is set to review its regional implications. Energy & Power: NEPRA approved a 30-year tariff for the 102MW Gulpur hydropower project at 9.3843 US cents/kWh; Petroleum Minister Ali Pervaiz Malik pushed energy security via faster oil and gas exploration and offshore drilling by Turkish Petroleum. Oil Import Policy: Petroleum Division will seek ECC nod to operationalise import on foreign supplier’s account through customs bonded storage facilities to strengthen supply resilience amid Hormuz disruptions. Finance & Tax: ATIR dismissed a taxpayer appeal against a “monstrous” demand, criticising the tax department for mechanical, non-speaking assessment; Karachi’s KWSC MD curbed the CFO’s payment powers for major contractor/vendor releases. Privatisation: PC signed a Financial Advisory Services Agreement with a KPMG-led consortium for HBFCL privatisation. Trade & Logistics: Goods transporters’ nationwide strike entered day two; talks are scheduled with the federal government and Sindh, with businesses warning of supply-chain fallout. Agri: Tobacco growers in KP rejected a urea ban as “unjustified,” while Karandaaz and Kissan Gudam plan digital financing using electronic warehouse receipts. City Watch (Karachi): A commercial building was sealed over sewage overflow; power to a Karachi water pumping station was suspended after cable theft.

Mecca Defence Pact: Pakistan’s FM Ishaq Dar said the Saudi-Turkey-Pakistan “Mecca Joint Defence Agreement” is “purely defensive,” open to other regional countries, and treats an attack on one as an attack on all. Regional Energy Shock: Iran says it won’t reopen the Strait of Hormuz without US meeting its conditions, including compensation, as crude prices slide; meanwhile Yemen’s Houthis claimed a drone attack on Saudi Aramco’s Jazan refinery. Transport & Costs: Lahore Metro Bus operations may suspend from Aug 11 after VEDA cited fuel supply disputes and rising costs. Financial Watchdog: SECP referred Blink Capital Management’s alleged Rs. 446.664m investment fraud to FIA. Local Economy & Industry: Turkish Petroleum is set to start offshore drilling in Pakistan’s territorial waters, aiming to cut import dependence; cement capacity utilization jumped in July as demand recovered. Health & Skills: Report flags rising HIV/Hepatitis C tied to unsafe injections and weak regulation; OIC-COMSTECH launched a medical tech internship programme. Crime & Justice: Karachi’s Mir Raza Ali case shifted from kidnapping to murder after exhumation and a second post-mortem, with a new probe team formed.

Capital Markets & Rule of Law: The Lahore High Court ruled that bank customers’ digital data is “property” and misuse can amount to criminal breach of trust, a major signal for Pakistan’s banking and cybercrime enforcement. Trade & Industry Support: The Ministry of Commerce sanctioned Rs10bn for textiles and other export sectors under duty drawback and technology upgradation schemes to boost liquidity and competitiveness. Markets: The PSX ended the week up 5,336 points (3.03% WoW) as easing oil prices and improved external financing hopes lifted sentiment. Energy, Transport & Cost Pressure: Goods transporters announced an indefinite nationwide strike over fuel costs and taxes, raising risks to raw-material supply and export deliveries; separately, manufacturers warned that higher duties on medicine raw materials could threaten affordable access. Water & Industry Risk: NDMA flagged possible low-level flooding and flash risks across multiple regions, while Hub’s water crisis is threatening industrial shutdowns and jobs. Governance & Business Climate: A decade-long delay in finalising telecom competition rules is tied to a jurisdiction fight between MoITT and the CCP, keeping telecom market rules in limbo. Regional Diplomacy with Economic Spillovers: Iran issued a list of demands for reopening the Strait of Hormuz, complicating trade expectations. Local Health & Services: Karachi launched a union-council kidney disease screening programme via KIKD, aiming for early detection and referrals.

Fuel-price anger & transport hit: Thousands protested nationwide against fuel hikes and a new petroleum levy, with road blockades reported in Karachi, Lahore, Peshawar, Quetta, Islamabad and Rawalpindi; separately, goods transporters announced an indefinite wheel-jam strike from Aug 8 over daily fuel pricing, tolls and “unjust fines,” threatening supply chains. Gold & inflation pressure: Gold rose in Pakistan, with per tola up Rs2,200 to Rs456,536; the fuel-tax burden also drew attention as petrol charges alone take a big slice of the retail price. Regional trade diplomacy: Pakistan and New Zealand held political consultations and a joint trade committee meeting in Wellington, agreeing to expand trade, investment, science/tech and education links. Vision Pakistan 2047: PM Shehbaz Sharif is set to roll out a 20-year roadmap on Aug 12 focused on youth, tech and sustainable development. Corporate/finance signals: SBP injected Rs3,276bn into the market; PSX shed about 346 points amid selling pressure. Food quality checks: Lab testing found 176 of 491 packaged edible oil, ghee and milk samples failed national standards. Telecom during outages: Jazz and Ufone users reported mobile internet and call disruptions during load shedding. Makkah defence pact ripple: Saudi Arabia, Türkiye and Pakistan signed a trilateral “attack on one, attack on all” defence agreement, drawing regional debate.

Defence Pact: Saudi Arabia, Türkiye and Pakistan signed the Makkah Joint Defence Agreement, pledging that an attack on one will be treated as an attack on all, with Pakistan’s foreign ministry calling it “collective deterrence” amid West Asia tensions; Regional Backlash: Iran’s officials mocked the pact as a “paper agreement” that won’t bring security, while analysts debate how far commitments would go; Food Safety: Planning Minister Ahsan Iqbal ordered a nationwide quality survey of loose edible oil, ghee and milk after lab tests showed about 36% of packaged samples failed standards; Inflation Watch: SPI-based inflation rose 0.28% WoW, driven mainly by higher onion, chicken and pulse prices; Fuel & Protests: Jamaat-e-Islami staged Karachi protests against petroleum levy and fuel price hikes; Tax Enforcement: Punjab Revenue Authority launched zero-tolerance E-IMS enforcement for hotels and restaurants to curb fake invoices; Digital Payments: 1LINK welcomed a new board to support Pakistan’s digital payments growth; Markets: PSX closed down 0.19% as Middle East escalation fears kept investors cautious; Climate & Water: Sindh highlighted carbon credit reforms, while PTCL and PPAF completed safe-water access for 150,000 people in South Punjab and Sindh.

Trilateral Defence Deal: Saudi Arabia, Turkey and Pakistan signed the “Makkah Joint Defence Agreement,” with a collective defence clause saying an armed attack on any one will be treated as an attack on all, as regional tensions involving Iran and Israel keep rising. Geopolitics & Markets: Analysts framed the pact as a potential “NATO-style” deterrent that could shift West Asia’s balance of power, while oil and shipping risks around the Strait of Hormuz continue to feed into energy prices. Anti-Corruption Crackdown: The FIA arrested three Pakistan Customs officials in an alleged Rs5mn bribery case, after a trap raid recovered Rs500,000 and the probe pointed to extortion tactics. Energy & Transport Pressure: Goods transporters confirmed a nationwide strike on Aug 8, citing rejection of daily fuel pricing changes; separately, JI announced nationwide sit-ins against petroleum levy and inflation. Regulatory Watch: Lahore High Court restrained LPG firms from charging an additional premium, ordering OGRA and companies to respond. Disaster Readiness: Govt activated a dedicated monsoon Flood Emergency Call Center for Islamabad, AJK and Gilgit-Baltistan via dial 911. Business & Investment: CDWP referred the Rs37.13bn Pakistan Space Centre project to ECNEC for approval, while SECP registered a record 5,438 companies in July. Gold Update: Gold prices jumped in Pakistan on Aug 7, with 24-karat tola rising to Rs454,336.

Saudi-Pak Talks: PM Shehbaz Sharif arrived in Saudi Arabia for a three-day visit, with meetings expected with Crown Prince Mohammed bin Salman and focus on trade, investment and regional cooperation. Gas & Power Reforms: Govt is set to introduce a Multi-Year Tariff (MYT) framework for gas utilities, while Nepra amended Prosumer Regulations to let small rooftop solar users (up to 25kW) get DISCO approval directly. Tax Tech Push: FBR launched real-time electronic production monitoring for aerated waters and beverages, targeting compliance and cracking down on counterfeit production. SBP Banking Rule: SBP directed banks to settle Premium Prize Bond sale transactions with BSC on the same day to improve transparency. Capital Markets: PSX crossed 600,000 investors in July; the KSE-100 also extended gains as investors bought select heavyweights. World Bank & Climate: Connected Punjab’s World Bank funding shows about one-third tagged as climate finance, mainly for mitigation. Energy Trade: Pakistan and Iran agreed to expand electricity imports beyond 100MW and strengthen energy cooperation. Governance Scrutiny: Senate panel questioned million-rupee public sector salaries and sought details on OPF appointments. Press Freedom: Pakistan imposed new restrictions on foreign media movement, requiring permits and registration beyond Islamabad, Lahore and Karachi.