Morning News: ADB approves $800m financing for Pakistan - By WE Research

Jun 4 2025



  • The Asian Development Bank (ADB) has approved an $800 million program to enhance fiscal sustainability and public financial management in Pakistan through the Improved Resource Mobilization and Utilization Reform Program, Subprogram 2. This includes a $300 million policy-based loan and ADB’s first-ever policy-based guarantee of up to $500 million, expected to attract $1 billion from commercial banks. Originally scheduled for May 28, the ADB board meeting was delayed due to a request from the Indian executive director and later held on June 3. The program supports reforms in tax policy, public expenditure, digitalisation, and private sector development, aiming to reduce Pakistan’s fiscal deficit and debt while fostering sustainable growth. ADB and Pakistani officials emphasize the country's recent macroeconomic improvements and the importance of coordinated efforts for long-term fiscal resilience.
  • President Asif Ali Zardari has summoned the National Assembly and Senate to convene on June 10 at 5 p.m. for the federal budget session for the fiscal year 2025–26. Finance Minister Senator Muhammad Aurangzeb is expected to present the budget and Finance Bill during these sessions, called under Article 54(1) of the Constitution. The National Assembly Secretariat has issued special passes for press, officials, and other attendees, while a comprehensive security plan has been put in place for the Parliament House to ensure safety during the proceedings.
  • Pakistan’s budget team, led by Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb, is working to convince the IMF to drop its demand to raise the Federal Excise Duty (FED) on fertilizer from 5% to 10% in the 2025–26 budget. The government also aims to avoid a proposed 5% FED on pesticides, with both moves intended to ease pressure on the struggling agriculture sector. In exchange, Pakistan has highlighted provincial amendments to the Agriculture Income Tax (AIT), which will begin collection in the next fiscal year. The Federal Board of Revenue (FBR) has been asked to assess the impact of proposed tariff rationalization on imports, amid concerns about potential tax evasion. Meanwhile, the IMF has rejected requests to continue GST exemptions for the former FATA/PATA regions, with a reduced 12% GST now likely to be imposed. The negotiations reflect a balancing act between IMF conditions and domestic political and economic challenges, particularly in the agricultural sector.

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Pakistan Power: Base tariff cut and circular debt overhaul to reshape energy sector outlook - By AKD Research

Jul 7 2025


AKD Securities


  • The national base tariff is determined at PkR34.0/kwh for FY26, down by 4%YoY compared to PkR35.5/kwh in FY25.
  • GoP has accelerated its power sector reform agenda, with the PkR1.25tn commercial bank borrowing facility to reduce the mounting circular
  • Continued resolution of the circular debt would be beneficial for companies under our coverage space, namely: OGDC (Dec’25 TP: PkR371/sh), PPL (Dec’25 TP: PkR281/sh) and PSO (Dec’25 TP: PkR729/sh).
Autos: Marking FY25 as a year of recovery - By JS Research

Jul 7 2025


JS Global Capital


  • We preview automobile sales volumes for Jun-2025, expecting the three major players including Indus Motors Company Ltd (INDU), Honda Atlas Cars Ltd (HCAR), and Pak Suzuki Motor Company Ltd to post combined growth of 33%/9% YoY/MoM, reaching ~14.5k units – highest since Dec-2022.
  • All three companies are projected to post strong YoY volume growth, with HCAR leading peers with 65% YoY growth in Jun2025, followed by PSMC (+31% YoY), and INDU (+25% YoY), helped by pre-budget buying ahead of anticipated negative budgetary measures. Meanwhile, Sazgar Engineering Works Ltd (SAZEW) volumes also rose 55% YoY in Jun-2025.
  • For FY25 cumulatively, the auto sector witnessed a strong recovery, with volumes expected to grow by 37% to ~121k units, supported by improving macroeconomic stability and a rebound in consumer confidence amid stable car prices.
Technical Outlook: KSE-100 setting a record - By JS Research

Jul 7 2025


JS Global Capital


  • Bullish momentum continued for the KSE-100 index, which gained 1,262 points to close at 131,949. Trading volumes stood at 733mn shares, compared to 900mn shares previously. The index is likely to retest Friday’s high of 132,130; a break above this level could target 133,412, with potential to rise further toward 135,232. On the downside, support is seen in the 130,710-131,600 range. The RSI and MACD continue to rise, reinforcing the positive outlook. We advise investors to ‘Buy on dips,’ with risk defined below 130,716. Immediate support and resistance are placed at 131,067 and 132,480, respectively.
Morning News: Pakistan, US reach accord on trade and tariffs - By HMFS Research

Jul 7 2025


HMFS Research


  • With less than a week to go before the July 9 deadline, Pakistan and the United States have concluded a critical round of trade negotiations. While both sides have reached an understanding, a formal announcement is expected only after the US concludes similar ongoing negotiations with other trade partners. The tariff relief, temporarily paused earlier this year, was at risk of expiring if no progress had been made by the July 9 deadline. The agreement, when signed, could lead to increased Pakistani imports of US goods — notably crude oil — and potential American investment in Pakistan’s mining, energy, and infrastructure sectors.
  • The U.S. dollar hovered near its lowest since 2021 against the euro and the weakest since 2015 versus the Swiss franc on Monday, with traders alert for any trade-related headlines in the countdown to President Donald Trump’s tariff deadline. The dollar index , which measures the currency against those three rivals and three more major counterparts, was flat at 96.967, hovering above Tuesday’s nearly 3-1/2-year trough of 96.373.
  • US President Donald Trump said on Friday that he had signed 12 trade letters to be sent out next week ahead of an impending deadline for his tariffs to take effect. “I signed some letters and they’ll go out on Monday, probably 12,” Trump told reporters aboard Air Force One, adding that the countries to which the letters would be sent will be announced on the same day. His comments come days before steeper duties — which the president said on Thursday would range between 10 and 70 per cent — are set to take effect on dozens of economies, from Taiwan to the European Union.
Morning News: Pakistan, US reach accord on trade and tariffs - By Vector Research

Jul 7 2025


Vector Securities


  • With less than a week to go before the July 9 deadline, Pakistan and the United States have concluded a critical round of trade negotiations, reaching an understanding on a deal that could shape the future of the country’s key export sectors. The delegation arrived in Washington on Monday with the aim of finalising a long-term reciprocal tariff agreement that would prevent the re-imposition of a 29 per cent tariff on Pakistani exports — primarily textiles and agricultural products. The tariff relief, temporarily paused earlier this year, was at risk of expiring if no progress had been made by the July 9 deadline.
  • Pakistan and Azerbaijan in a major development Friday signed a partnership agreement. The agreement for investment of a total of $2 billion by Azerbaijan in the economic sector of Pakistan.
  • Foreign exchange companies contributed around $450 million to remittance inflows during June, taking their total contribution to approximately $5 billion in FY25, according to the Exchange Companies Association of Pakistan (ECAP). “We sold about $450m to banks in June, highlighting our growing role in supporting the country’s exchange rate stability,” said Zafar Paracha, Secretary General of ECAP.
Morning News: Azerbaijan to invest $2bn in economic sector WE Research

Jul 7 2025



  • Pakistan and Azerbaijan have signed a significant $2 billion investment agreement, marking a new milestone in bilateral economic relations. The deal, signed in the presence of Prime Minister Shehbaz Sharif, Deputy Prime Minister Ishaq Dar, and Azerbaijani Economy Minister Mikayil Jabbarov, reflects growing investor confidence in Pakistan. It follows a cordial meeting between Prime Minister Sharif and Azerbaijani President Ilham Aliyev in Khankandi, with a more detailed agreement to be finalized during the Azerbaijani President’s upcoming visit to Pakistan. Both countries committed to further enhancing cooperation across various sectors, including trade, investment, and climate issues, as emphasized by Prime Minister Sharif during his remarks in Shusha.
  • With less than a week before the July 9 deadline, Pakistan and the United States have reached a preliminary understanding on a trade agreement aimed at securing Pakistan’s key export sectors, particularly textiles and agriculture, from the re-imposition of a 29% tariff. Led by Commerce Secretary Jawad Paal, the Pakistani delegation concluded four days of negotiations in Washington, with a formal announcement expected after the US finalizes talks with other trade partners. The proposed deal includes reciprocal tariff arrangements, increased Pakistani imports of US goods such as crude oil, and potential American investment in Pakistan’s mining, energy, and infrastructure sectors—including projects like Reko Diq. Officials remain optimistic that the agreement will preserve Pakistan’s access to the US market and revitalize economic ties strained since the Trump-era tariffs.
  • Oil prices dropped over 1% after OPEC+ surprised markets by announcing a larger-than-expected production increase of 548,000 barrels per day (bpd) for August, raising fears of oversupply. Brent crude fell to $67.50 per barrel, while U.S. West Texas Intermediate dropped to $65.68. The hike, up from prior monthly increases of 411,000bpd, reflects a more aggressive push for market share, with Saudi Arabia driving much of the actual output gains. OPEC+ cited strong global demand and low inventories as justification. Goldman Sachs expects a final 550,000bpd increase to be announced for September at the group’s August 3 meeting. Meanwhile, Saudi Arabia raised prices for its flagship Arab Light crude in a show of confidence in demand. In a related development, U.S. President Trump indicated higher tariffs will be announced by July 9, with implementation set for August 1.
Market Wrap: Banking on Bulls: KSE-100 Hits a New Milestone - By HMFS Research

Jul 4 2025


HMFS Research


  • The Pakistan Stock Exchange (PSX) sustained its upward trajectory in today’s session, with the benchmark KSE-100 Index surging to a fresh intra-day high of 132,130 before closing at 131,949, up by a robust 1,262 points (+0.97%). The rally was supported by sustained investor interest—particularly in the banking sector—as participants continued to rotate into fundamentally sound, undervalued plays amid a supportive macroeconomic backdrop. Trading activity remained strong, with the All-Share Index posting a healthy turnover of 731mn shares, while KSE-100 volumes came in at 199mn shares, indicating broad-based participation. Top volume leaders included, WTL (58mn), BML (36mn), and TREET (30mn). The banking sector emerged as the primary driver of index gains, supported by attractive dividend yields, and compelling P/B valuations. The recent softening in Pakistan’s sovereign credit default swap (CDS) spreads has further improved investor sentiment by lowering perceived external risk, catalyzing flows into equities. While the momentum remains firmly intact, the market’s proximity to psychological resistance levels suggests room for near-term consolidation, especially as investors may opt to lock in recent gains. However, the medium-term narrative remains constructive, underpinned by prospects of continued IMF engagement, fiscal reforms, and easing external account pressures. We continue to advise investors to remain selective and focus on sectors with resilient fundamentals and earnings visibility. In the current phase of the cycle, valuation discipline, liquidity considerations, and macro-driven event positioning will remain critical in navigating market dynamics.
Market Wrap: Highlights of the day - JS Research

Jul 4 2025


JS Global Capital


  • The KSE-100 Index closed the session on a strong note, gaining 1,262 points to settle at 131,949. Broad-based buying was seen across key sectors, with Autos, banks, and Power leading the charge. Investor sentiment remained upbeat, supported by improved macros and anticipation of further monetary easing. Looking forward, we have a favorable view on the market in the near term, backed by favorable liquidity conditions, positive policy cues, and foreign interest returning to key sectors. However, intermittent consolidation cannot be ruled out as the index approaches resistance levels.
Fertilizers: Sales to recover in June-2025; albeit inventory level remains high - By JS Research

Jul 4 2025


JS Global Capital


  • As per provisional figures, Urea off-take during Jun-2025 is expected to clock in at 580k tons, arriving at a growth of 20% YoY/ 39% MoM. Cumulatively, Urea off-take is likely to post a negative growth of 23% YoY during 1HCY25. On the other hand, DAP off-take is likely to fall 15% YoY during the month.
  • Company-wise, Fauji Fertilizer Company (FFC) is expected to post Urea off-take of 269k tons in Jun-2025, up 4% YoY. This includes 51k tons of granular Urea. Engro Fertilizers (EFERT) is likely to post growth 32% YoY, arriving at 205k tons. In terms of market share, EFERT Urea share improved by 3ppts YoY to 35%, while FFC’s share dipped 8ppts YoY during the month.
  • Urea inventory is expected to remain elevated at around 1.3mn tons by the end of 1HCY25. Assuming capacity utilization remains stable at current levels, allowance of export can be a key trigger in our view, helping to mitigate inventory buildup despite the anticipated increase in local sales during 2HCY25.
Technical Outlook: KSE-100; Upside to continue - By JS Research

Jul 4 2025


JS Global Capital


  • The KSE-100 Index witnessed a volatile session to close at 130,687, up 343 points DoD. Volumes stood at 900mn shares compared to 1,026mn shares traded in the last session. The index is expected to revisit yesterday’s high of 131,325 with a break above targeting 132,134, which can extend to 133,412. However, any downside will find support in the range of 129,050-129,870 levels. The RSI and the MACD are heading up, supporting a positive outlook. We advise investors to 'Buy on dips', keeping stoploss below 128,616. The support and resistance levels are placed at 129,867 and 131,415, respectively.
Morning News: $350m loan agreement signed with ADB to boost women’s financial inclusion - By WE Research

Jun 25 2025



  • The Government of Pakistan and the Asian Development Bank (ADB) have signed a $350 million loan agreement for the “Women Inclusive Finance Sector Development Program (Subprogram-II),” aimed at advancing women’s economic empowerment. The agreement, signed by representatives from the Economic Affairs Division, ADB, and the State Bank of Pakistan, underscores Pakistan’s commitment to fostering inclusive growth. Building on reforms from Subprogram I, the initiative focuses on enhancing policy and regulatory frameworks, increasing access to finance for women, supporting women’s entrepreneurship, and promoting equitable workplaces in the financial sector. The financing includes a $300 million policy-based loan and a $50 million Financial Intermediary Loan.
  • In Q4 FY2024-25, Pakistan's Consumer Confidence Index (CCI) rose by 9.2% from the previous quarter and 24.6% year-on-year, reaching 96.2 points—the highest level since tracking began in 2022. The report, jointly issued by Dun & Bradstreet Pakistan and Gallup Pakistan, highlights improved public sentiment regarding both current financial conditions and future economic prospects. Notably, the Future Confidence Index crossed the 100-point mark for the first time, indicating a shift toward optimism. Key improvements were seen in household income expectations, financial outlook, and savings sentiment. However, concerns about rising unemployment persist, with 61% noting job losses in the past six months. Confidence gains were broad-based, with the most significant increases among individuals under 30. The findings underscore a cautiously optimistic economic outlook, though continued reforms are needed to address labor market challenges.
  • The Power Division has requested a positive adjustment of 10 paisa per unit in electricity tariffs for May 2025 under the monthly Fuel Charges Adjustment (FCA) mechanism to recover Rs 1.255 billion from consumers of Distribution Companies (Discos). This request, submitted by CPPA-G, will be reviewed in a public hearing by NEPRA on June 29, 2025. In May 2025, total electricity generation rose by 1.2% yearon-year to 12,755 GWh, with a basket price of Rs 7.7739 per unit. Hydel power contributed 37% of total generation, increasing 24% from the previous year. Local coal and imported coal generation rose by 3% and 108% respectively, while RFO-based generation declined by 68%. Nuclear power and gas-based generation both fell, while RLNG contributed 17% at a high cost of Rs 23.73 per unit. Renewable sources like wind and solar contributed modestly. Overall, generation costs and energy mix shifts have prompted the proposed tariff adjustment.
Morning News: UK trade envoy visits Pakistan to advance investment and commercial ties - By WE Research

Jun 24 2025



  • UK Trade Envoy Mohammad Yasin MP embarked on a three-day visit to Karachi and Islamabad to strengthen UK-Pakistan trade ties and promote long-term investment ahead of the upcoming UK Pakistan Trade Dialogue. The visit aligns with the UK's Invest 2035 initiative, focusing on high-growth sectors like clean energy and digital technologies. Yasin emphasized the strong existing commercial relationship and the potential for deeper cooperation. With over 200 UK companies active in Pakistan and the UK being its largest European trading partner, the visit includes meetings with senior government officials and business leaders to explore new collaboration opportunities. The mission is expected to lay the groundwork for enhanced trade, investment, and regulatory reforms, reinforcing Pakistan’s role as a key UK trade partner.
  • Finance Minister Muhammad Aurangzeb, in his address to the National Assembly on the Finance Bill 2024-25, announced the withdrawal of sales tax and duty exemptions on imported cotton and yarn to support local farmers and revive the textile industry. He outlined Rs36 billion in additional tax measures to offset revenue losses from a reduced solar panel tax and emphasized a “balanced budget” focused on expanding the tax base, digitalization, fiscal responsibility, and easing burdens on salaried individuals. Key initiatives include boosting BISP funding, launching digital loans for small farmers, expanding affordable housing, and enhancing women's financial inclusion. The minister revised several proposals, such as lowering income tax for lower earners and reducing the sales tax on solar components. Amendments were also made to FBR powers and e-commerce taxation, with exemptions provided for nonfilers on smaller-scale transactions. Aurangzeb highlighted regional instability risks and stressed the need for national unity and consensus to ensure sustainable economic recovery.
Morning News: Pakistan gets $20bn in external assistance - By WE Research

Jun 23 2025



  • Pakistan secured nearly $20 billion in foreign loans and grants during the first 11 months of FY2024-25, surpassing its $19.2 billion annual target. This total includes $6.89 billion in fresh inflows—9% lower than the same period last year—and significant rollovers from China, Saudi Arabia, and the UAE. The rollovers, amounting to $8 billion, and about $2 billion from the IMF, played a major role in reaching the target. Despite delays in the IMF programme affecting commercial lending and bilateral disbursements, multilateral lenders contributed $3.37 billion. Project financing stood at $2.98 billion, while $3.9 billion was used for budgetary support. Additionally, $1.77 billion was raised through Naya Pakistan Certificates, reflecting a boost from overseas Pakistanis, and international bond targets and commercial borrowing remained underachieved due to economic challenges and credit concerns.
  • China, Pakistan, and Bangladesh have launched their first trilateral forum, marking a significant shift in regional diplomacy and signaling emerging alignments in South Asia. The inaugural meeting took place on June 19 in Kunming, China, bringing together senior diplomats from all three nations, including Pakistan’s Foreign Secretary who joined virtually. The initiative follows recent improvements in PakistanBangladesh ties and China’s increased regional engagement post-Sheikh Hasina’s exit from power. While the countries emphasized that the forum is not aimed at any third party, it is expected to raise concerns in India. The trilateral discussions focused on wide-ranging cooperation in areas like trade, industry, climate change, education, and maritime affairs. A joint working group was formed to implement agreed proposals, with all sides committing to principles of mutual trust, inclusivity, and development. China framed the forum as part of its vision for a “shared future” and deeper Belt and Road cooperation, positioning the alliance as a platform for peace, prosperity, and modernization in the region.
  • Amid rising tensions between Iran and Israel, Pakistan’s Oil and Gas Regulatory Authority (Ogra) has directed oil marketing companies to maintain a minimum 20-day fuel reserve and expedite imports to safeguard the country’s fuel supply. Authorities have ordered the immediate import of 140 million litres of petrol and rescheduled the arrival of a vessel to June 26, ahead of its original July 6 date. Pakistan State Oil expects another 140 million litres to arrive by July 1. While current reserves are sufficient, officials warn that any disruption in Gulf shipping routes—particularly through the Strait of Hormuz— could seriously impact Pakistan, which heavily depends on regional oil imports. Freight rates and insurance premiums for oil tankers have already surged due to instability, and operational issues such as GPS outages in the strait have been reported. The government has ruled out reducing the Petroleum Development Levy despite a 16% increase in global oil prices, indicating that domestic prices may rise. Finance and opposition leaders alike have expressed concern over the economic impact, prompting the formation of a high-level committee to monitor the evolving situation.
Morning News: In meeting with Pakistan’s COAS, Trump shows interest in long-term trade partnership - By WE Research

Jun 20 2025



  • During a cordial and extended meeting at the White House, U.S. President Donald J. Trump and Pakistan’s Chief of Army Staff, Field Marshal Syed Asim Munir, discussed expanding bilateral cooperation across various domains including trade, economic development, AI, energy, and counter-terrorism. Both sides emphasized strategic convergence and mutual interests, with President Trump expressing strong interest in a long-term trade partnership and praising Pakistan’s regional peace efforts. The leaders also addressed tensions between Iran and Israel, highlighting the need for conflict resolution. The meeting, which included high-level officials from both countries, reflected the warmth of ties and concluded with an invitation for President Trump to visit Pakistan.
  • Attock Refinery Limited (ARL) has signed an agreement with Italian engineering firm STP Studi Tecnologie Progetti for Front End Engineering Design (FEED) and Project Management Consultancy (PMC) as part of its refinery upgradation project, estimated to cost up to US$ 600 million. This major investment marks a significant milestone in ARL’s strategy to enhance value addition and environmentally friendly fuel production. The upgrade includes a Continuous Catalyst Regeneration (CCR) unit and the revamp of the Diesel Hydro Desulfurization Unit, following licensor FEED studies with UOP/Honeywell. The project aims to improve product quality, reduce environmental impact, and align ARL’s operations with international fuel standards.
  • The Special Investment Facilitation Council (SIFC) has approved a revenue-sharing agreement between Sui Southern Gas Company Limited (SSGC) and Jamshoro Joint Venture Limited (JJVL), allowing the JJVL LPG-NGL extraction plant to become operational by July 31. Under the agreement, revenue will be shared at a 66:34 ratio in favor of SSGC, which will also receive a 25% share of LPG based on Ogranotified producer prices, generating an estimated Rs2 billion annually. While both parties have initialed the deal, formal signing will follow the issuance of SIFC meeting minutes. SSGC sought SIFC’s endorsement to ensure transparency and avoid future scrutiny by NAB.
Morning News: Pakistan to unveil Rs100bn EV policy today - By WE Research

Jun 19 2025



  • The federal government is set to unveil its National Electric Vehicle (NEV) Policy 2025-30, marking a significant move toward clean mobility, energy efficiency, and industrial self-reliance in Pakistan. The policy allocates over Rs100 billion in subsidies, introduces a levy on internal combustion engine (ICE) vehicles to fund the transition, and launches with Rs9 billion in FY2025-26 to support over 116,000 ebikes and 3,000 e-rickshaws through a digital platform, with 25% reserved for female riders. Aimed at achieving 30% EV sales by 2030, the policy seeks to cut 4.5 million tons of CO2 emissions, save $1 billion in annual fuel imports, and utilize the country’s electricity surplus. It also promotes domestic EV manufacturing, targeting 90% localization in two- and three-wheelers by 2026 through tariff protections.
  • The Senate Standing Committee on Finance, during its review of the Finance Bill 2025, recommended a zero-rated tax on incomes up to Rs1.2 million and rejected a proposed tax on individuals running small online businesses. While endorsing taxes on high-earning online academies and teachers, the committee opposed levies on exclusive clubs like the Islamabad Club, despite the FBR's argument that such clubs serve only a select elite. The FBR outlined plans to expand digital taxation to a wide range of online services, including streaming platforms, e-learning, telemedicine, and cloud services, but faced resistance on taxing small-scale digital entrepreneurs. Additionally, the committee debated restrictions on property purchases by tax non-filers, with a proposal to raise the allowable purchase limit from 130% to 500% of declared income. Finance Minister Muhammad Aurangzeb reaffirmed the government's intent to broaden the tax base by bringing non-filers into the net.
  • The government has introduced a bold National Tariff Policy aimed at reducing average import duties by 52% over five years to boost exports, reduce the trade deficit, and promote industrial modernization. Relying heavily on the World Bank's GTAP model, the policy projects exports will grow faster than imports, with a potential 7–9% revenue gain despite an estimated Rs500 billion static revenue loss. However, opposition lawmakers raised concerns about the policy's assumptions, lack of localized analysis, and potential impacts on inflation, reserves, and struggling domestic industries. Immediate tariff reductions have been proposed in the FY25 budget, including elimination of additional duties and lowering customs duties on thousands of tariff lines. While officials claim the reforms will drive export-led growth, enhance technology adoption, and increase employment, critics warn of economic disruption, particularly for inefficient industries, and called for greater transparency and scrutiny of the underlying models. A monitoring committee led by the finance minister will oversee implementation, with a new auto policy and further tariff rationalizations set to begin in July 2026
Morning News: July-May C/A posts $1.8bn surplus - By WE Research

Jun 18 2025



  • Pakistan recorded a current account surplus of $1.8 billion during the first 11 months of FY25, a significant improvement from a $1.57 billion deficit in the same period last year, largely due to a 29% year-on -year surge in workers’ remittances totaling $34.9 billion. Despite a widening trade deficit—caused by rising imports and declining exports—robust remittance inflows helped stabilize the external account. In May 2025, the country posted a $103 million deficit, narrowing 56% from the same month last year, as imports rose to $5.48 billion while exports dipped to $2.4 billion. The State Bank of Pakistan expects a continued surplus for FY25 but warns of a potential moderate deficit in FY26 due to strong import demand and global uncertainties. SBP projects foreign exchange reserves to reach $14 billion by June 2025 but highlights external risks such as geopolitical tensions, oil price volatility, and possible financial inflow shortfalls.
  • In April 2025, Pakistan's Large-Scale Manufacturing Industries (LSMI) index rose by 2.29% year-on-year to 108.37, though it declined 3.2% compared to March. Over the first 10 months of FY25, LSMI contracted by 1.52% year-on-year. Growth was led by industries such as automobiles (42.16%), cotton yarn (8.40%), garments (6.01%), and petroleum products (5.01%), while sectors like sugar (-14.55%), iron and steel (-10.11%), and cement (-5.62%) saw notable declines. Positive contributions came from tobacco, textiles, garments, and automobiles, whereas food, chemicals, non-metallic minerals, and machinery showed negative trends. LSMI, which makes up about 69% of manufacturing and 8% of GDP, reflects broader industrial health. Although some recovery was seen in the second half of FY24, challenges like weak global demand, currency devaluation, and fiscal constraints continue to weigh on overall industrial performance
Morning News: Dar says steps under way to enhance financial ties with Turkiye - By WE Research

Jun 16 2025



  • Pakistan is working to strengthen its economic partnership with Turkiye by enhancing cooperation in financial and logistics services, including plans to allow Turkish banks to operate in Pakistan and convening the 6th session of the Pakistan-Turkiye Joint Ministerial Commission. Turkiye has shown interest in investing in Pakistan’s Special Economic Zones (SEZs), prompting the development of a tailored investment package. Both nations aim to boost bilateral trade to $5 billion by 2025, up from the current $1.02 billion, with opportunities identified in Pakistan’s growing IT sector and healthcare projects like the Jinnah Medical Complex. Meanwhile, in the energy sector, the government has renegotiated contracts with several Independent Power Producers (IPPs), saving Rs3.612 trillion and reducing capacity costs. The circular debt remains a major challenge, amounting to Rs2,396 billion as of March 2025, with a Rs1.2 trillion refinancing package underway—funded by a debt service surcharge on electricity consumers—to stabilize the sector under the Circular Debt Management Plan.
  • The Reko Diq Copper Project is emerging as a transformative force for Pakistan’s economy, with expectations of contributing nearly 1% to GDP annually and attracting $2.5 billion in private sector investment. Backed by a $700 million concessional financing package from the IFC and the World Bank— marking IFC’s first mining investment in Pakistan—the project signals renewed global confidence in the country's economic potential. Spearheaded by Reko Diq Mining Company (RDMC), and owned jointly by Barrick Gold Corporation (50%) and Pakistani stakeholders (50%), the mine holds one of the world’s largest untapped copper reserves, with a 40-year life span and anticipated annual output of 200,000– 250,000 tons. It promises up to $2 billion annually in gross value added, full foreign exchange revenue, and significant job creation—up to 10,000 during construction and 3,000 during operations. Alongside strict environmental and social standards, the project includes investments in local infrastructure, community development, and gender inclusion. However, logistical challenges remain, particularly for Pakistan Railways, which must upgrade transport links to ports. The project also highlights a historical failure in governance, having been delayed for decades due to poor decision-making and legal missteps.
Morning News: Housing scheme with SBP’s help: Rs5bn set aside for mark-up subsidy - By WE Research

Jun 12 2025



  • In the FY26 budget, the federal government has allocated Rs 5 billion for a mark-up subsidy under a new low-cost housing scheme, launched in partnership with the State Bank of Pakistan, along with Rs 1 billion for the Naya Pakistan Housing Authority, to address the country’s housing shortage and revitalize the construction sector. This initiative follows the suspension of the "Mera Pakistan Mera Ghar" scheme in 2022 and includes several tax incentives, such as reduced withholding tax on property purchases and the abolition of the 7% Federal Excise Duty on property transfers. Finance Minister Muhammad Aurangzeb also announced tax credits for home loan interest on properties of specific sizes. Experts, including U.S.-based real estate consultant Dr. Anosh Ahmed, have praised these measures as timely and essential for stimulating economic growth, job creation, and industrial development, highlighting their potential to support middle-income families and boost real estate investment.
  • In May 2025, the Securities and Exchange Commission of Pakistan (SECP) registered a record 3,609 new companies, bringing the total number of registered companies in the country to over 255,000. Nearly all incorporations (99.9%) were completed digitally, with over Rs2.7 billion in capital raised. Private limited companies constituted 59% of new registrations, followed by single-member companies at 37%. The IT and e-commerce sectors led with 718 new incorporations, followed by trading, services, and construction. The SECP also issued 56 licenses, including to NGOs, capital markets, insurance, and nonbanking finance entities. Additionally, foreign investment was reported in 98 of the newly registered companies.
  • In a post-budget press briefing, Finance Minister Muhammad Aurangzeb announced a major tariff reform, eliminating additional customs duties on 4,000 out of 7,000 tariff lines and reducing duties on another 2,700 to support industrial growth and boost exports. This move, part of Pakistan’s broader economic restructuring, aims to lower input costs for exporters, integrate the economy into global supply chains, and transition from import substitution to export-led growth. The minister also introduced fiscal measures for relief to salaried individuals and small businesses, and prioritized support for construction and agriculture through lower transaction costs and improved credit access. Reforms in the digital economy include a new e-commerce framework and mandatory tax registration for small online businesses, alongside the imposition of an 18% GST on solar plant imports to support local manufacturing. The government has generated Rs400 billion in additional revenue this year and aims to raise the tax-to-GDP ratio to 10.9% by FY26. Aurangzeb also shared plans for bond repayments and new international market issuances, including a Panda Bond, while stressing the importance of improving Pakistan’s credit rating. The press conference was briefly disrupted by a journalists' boycott over the lack of a traditional technical briefing.
Morning News:Rs1trn set aside for PSDP - By WE Research

Jun 11 2025



  • The 2025–26 budget allocates Rs1,000 billion for the federal Public Sector Development Programme (PSDP), marking a 28.5% decline from the previous year’s Rs1,400 billion, with provincial Annual Development Plans totaling Rs2,869 billion. A separate Rs355 billion is set aside for state-owned entities, up from Rs196.8 billion last year. The highest PSDP allocation goes to transport (Rs225 billion), followed by water resources (Rs184 billion), while climate receives a minimal Rs5.26 billion despite Pakistan’s vulnerability. Key dam projects—Bhasha, Dasu, and Mohmand—receive Rs60, Rs20, and Rs15 billion, respectively. Allocations also include Rs70 billion for merged districts, Rs74.5 billion for special areas (AJK and GB), Rs24.7 billion for health, Rs23 billion for IT and telecom, Rs61 billion for higher education, and smaller amounts for skills training, education endowment, and disease control. The PSDP vision, “Uraan Pakistan,” emphasizes inclusivity and national potential.
  • The Finance Bill 2025–26 proposes to withdraw the 3% federal excise duty (FED) on the transfer of residential and commercial properties, effective July 1, 2025, which was initially imposed through the Finance Act 2024 and became subject to litigation. The government had earlier considered withdrawing it via ordinance but did not proceed. Additionally, withholding tax rates under Section 236K on property purchases are proposed to be reduced: 1.5% for properties up to Rs50 million, 2% for Rs50–100 million, and 2.5% above Rs100 million. In contrast, withholding taxes under Section 236C for sellers are being increased to 4.5%, 5%, and 5.5% for the same value brackets. Though no justification is provided for this disparity, it may incentivize buyers to prefer properties from builders and developers over the secondary market.
  • In the 2025–26 budget presented by Finance Minister Muhammad Aurangzeb, modest tax relief has been proposed for the salaried class, though it falls short of expectations. The new tax policy exempts annual incomes below Rs 600,000, with the next slab (Rs 600,000–1.2 million) seeing the tax rate drop from 5% to 1%, providing an 80% tax cut. Those earning between Rs 1.2 million and Rs 3.2 million will see rates reduced slightly, while the top two slabs (incomes above Rs 3.2 million) remain unchanged at 30% and 35%. Despite an average relief of 29%, higher earners benefit more proportionally—with individuals earning over Rs 1 crore getting a 27% cut—while the majority of salaried workers see minimal impact. The salaried class, contributing Rs 430 billion in taxes in the first ten months of FY 2024–25 (over 10% of total tax collection), remains the most taxed segment, especially when compared to retailers and exporters. With taxes deducted at source by employers acting as withholding agents, this group has little room to evade taxes unlike others, reflecting continued fiscal pressure despite marginal relief.
Morning News: ADB approves $800m financing for Pakistan - By WE Research

Jun 4 2025



  • The Asian Development Bank (ADB) has approved an $800 million program to enhance fiscal sustainability and public financial management in Pakistan through the Improved Resource Mobilization and Utilization Reform Program, Subprogram 2. This includes a $300 million policy-based loan and ADB’s first-ever policy-based guarantee of up to $500 million, expected to attract $1 billion from commercial banks. Originally scheduled for May 28, the ADB board meeting was delayed due to a request from the Indian executive director and later held on June 3. The program supports reforms in tax policy, public expenditure, digitalisation, and private sector development, aiming to reduce Pakistan’s fiscal deficit and debt while fostering sustainable growth. ADB and Pakistani officials emphasize the country's recent macroeconomic improvements and the importance of coordinated efforts for long-term fiscal resilience.
  • President Asif Ali Zardari has summoned the National Assembly and Senate to convene on June 10 at 5 p.m. for the federal budget session for the fiscal year 2025–26. Finance Minister Senator Muhammad Aurangzeb is expected to present the budget and Finance Bill during these sessions, called under Article 54(1) of the Constitution. The National Assembly Secretariat has issued special passes for press, officials, and other attendees, while a comprehensive security plan has been put in place for the Parliament House to ensure safety during the proceedings.
  • Pakistan’s budget team, led by Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb, is working to convince the IMF to drop its demand to raise the Federal Excise Duty (FED) on fertilizer from 5% to 10% in the 2025–26 budget. The government also aims to avoid a proposed 5% FED on pesticides, with both moves intended to ease pressure on the struggling agriculture sector. In exchange, Pakistan has highlighted provincial amendments to the Agriculture Income Tax (AIT), which will begin collection in the next fiscal year. The Federal Board of Revenue (FBR) has been asked to assess the impact of proposed tariff rationalization on imports, amid concerns about potential tax evasion. Meanwhile, the IMF has rejected requests to continue GST exemptions for the former FATA/PATA regions, with a reduced 12% GST now likely to be imposed. The negotiations reflect a balancing act between IMF conditions and domestic political and economic challenges, particularly in the agricultural sector.