AGP Executive Report

Poultry Exports: Pakistan ranks 11th globally in poultry production, but exports remain small. Finance Minister Muhammad Aurangzeb says better disease control, feed costs and cold-chain logistics are key to reaching overseas markets. Industrial Energy: FPCCI says power tariffs must fall below 9 cents per unit for all industrial users to lift exports and curb imports; current rates are around 12 cents. Power Supply: K-Electric warns of possible night-time load management as LNG shortages strain Karachi’s network, adding pressure on businesses already facing outages. Investment Climate: British International Investment calls Pakistan’s stabilisation encouraging but says consistent policies and continued reforms are needed to sustain investor confidence. Trade and Logistics: Pakistan has restored direct shipping links to seven European ports, a move expected to help exporters manage costs and reach markets. Technology: The government has inaugurated Islamabad’s Daanish IT Park, to be run by a company selected through a transparent bidding process and aimed at supporting IT and AI businesses.

Power Market: Nepra set grid-use charges for industrial users joining the competitive electricity market, ranging from Rs6.23 to Rs9.09 per unit for B-3 and B-4 consumers. Energy Supply: K-Electric warned that RLNG shortages could trigger evening load management, while Solar Pakistan 2026 opened in Karachi with more than 350 companies showcasing energy technologies. Farm Machinery: Al-Ghazi Tractors sent its first 18 tractors to Uzbekistan and signed a partnership to expand sales and technology cooperation. Textile Exports: APTMA and the Chainstore Association are working to replace imported retail goods with local products and take Pakistani brands overseas. Trade Compliance: FBR is consulting chemical and dye merchants on monitoring imports under the Export Facilitation Scheme amid concerns about diversion to local markets. Shipping: Pakistan has restored direct weekly service between Karachi and European ports, offering exporters another route as freight costs rise. Export Finance: The commerce minister urged wider credit insurance and financing for small and first-time exporters.

Inflation and Costs: Annual inflation reached 11.97%, with wheat flour, chicken and fuel among the items adding pressure. Petrol and diesel prices also rose, while a Rs1.11-per-unit power adjustment will lift electricity bills. Energy Supply: PSO signed a petroleum-supply agreement with Oman’s OQ Trading, as Pakistan seeks more secure fuel supplies. Plans to end broad gas and electricity subsidies from 2027 could reshape costs for households and businesses. IMF Funding: A staff-level agreement could unlock about $1.2 billion, subject to board approval. The Fund is also pressing Pakistan to end broad fuel subsidies, leaving limited room to shield consumers and industry from rising costs. Trade and Exports: Direct Karachi–Europe shipping has resumed, offering exporters a route to cut freight costs. Pakistan and Bahrain are targeting $1 billion in bilateral trade and pushing to advance a GCC free-trade agreement. Industry Outlook: Knitwear exporters warn that rising costs are putting foreign orders at risk, while the government is being urged to widen export-credit protection and financing for small exporters.

IMF Deal: Pakistan reached a staff-level agreement that could unlock about $1.21 billion, pending board approval. The Fund also urged a prompt end to broad fuel subsidies. Rising Costs: Petrol rose Rs2.31 per litre and diesel 78 paisas; electricity bills will include a temporary Rs1.11-per-unit fuel adjustment, adding pressure on businesses. Trade Links: Pakistan and Bahrain agreed to set up trade and investment working groups and accelerate efforts to conclude a GCC-Pakistan free-trade agreement; an energy group is due to discuss oil, gas and minerals next month. Shipping and Ports: MSC restored a weekly Karachi-Europe service, offering exporters a direct link amid longer routes and higher freight costs. Separately, Karachi Gateway Terminal says dredging will let it handle vessels carrying up to 120,000 tonnes, with potential annual freight savings of more than $150 million for traders. Export Industries: Pakistan’s knitwear sector faces mounting cost pressures, while officials called for a poultry export strategy to help the industry reach international markets.

IMF and Energy Costs: Pakistan reached a staff-level agreement for about $1.21 billion in IMF financing, pending board approval. The Fund urged an end to broad fuel subsidies, while regional supply disruptions and higher oil prices continue to squeeze businesses. Power Bills: NEPRA approved a Rs1.11-per-unit fuel adjustment for October bills, adding to costs for households and industry; lifeline consumers are exempt. Trade and Investment: Pakistan and Bahrain set a $1 billion bilateral trade target within three years and agreed to expand cooperation in industry, agriculture, energy, logistics and investment through joint working groups. Exports and Shipping: Knitwear exporters warn rising costs are putting foreign orders at risk, while a restored direct Europe shipping service is expected to help exporters manage freight challenges.

IMF Deal: A staff-level agreement could unlock $1.21 billion for Pakistan, subject to Executive Board approval. The Fund estimates FY26 growth at 3.6% and warns that higher energy costs and supply disruptions are weighing on momentum. Energy Costs: Petrol rises Rs1.82 to Rs396.65 per litre from October 8, while diesel falls 91 paisas to Rs394.94. Exporters are urging the government to ensure reliable, competitively priced energy and clear tax refunds, as imports outpace exports and widen the trade deficit. SME Finance: The government aims to lift SME lending to Rs2 trillion by June 2028 and launch a financing portal by November’s end; lending reached Rs1.137 trillion by September. Power Reform: Officials are reviewing regulatory changes to address falling grid demand, growing solar use and legacy capacity costs. Cotton: Kharif output is estimated at 6.7 million bales, well below the 9.64 million target, raising concerns for textile mills and import needs.

Trade and Investment: Pakistan and Germany agreed to strengthen business ties, with German firms invited to explore opportunities in agriculture, food processing, technology and manufacturing. Energy and Manufacturing: A power shortfall above 4,000MW has triggered outages, including a Karachi blackout, while Faisalabad’s power-loom sector faces widespread shutdowns and more than 100,000 job losses. Textiles and Ports: Pakistan-Qatar textile links gained a boost at an exhibition in Doha, while Karachi and Constanta ports signed a framework to support Asia-Europe trade. Telecom: Proposed competition rules would let the regulator require dominant operators to provide national roaming, as the sector prepares for wider 5G deployment. Housing and Construction: The government aims to lift mortgage finance to 5% of GDP by 2035 and build up to 400,000 homes annually, a plan with potential to support construction and its allied industries.

Fertilizer & Competition: CCP authorised Fatima Fertilizer’s acquisition of Agritech shares after finding it would not substantially lessen competition in Pakistan’s urea and SSP markets. Political Stability & Industry: PM Shehbaz Sharif urged PTI to end its long march and sit-ins, warning agitation could disrupt exports, manufacturing and imports. Maritime & Trade: Karachi and Gwadar ports discussed steps to strengthen Pakistan’s maritime sector, while analysts flagged a widening trade warning as export momentum slows and imports rise. Energy & Cost Pressure: Pakistan’s electricity shortfall crossed 4,000MW, and fuel subsidies were extended to over 9 million low-income people amid Middle East-driven price pressure. Agriculture & Water: IRSA approved a 22% Rabi shortage for Punjab and Sindh; wheat MSP needs provincial consensus for fair farmer returns. Industry & Exports: TDAP inaugurated Lahore’s International Exhibition of Handmade Carpets; NCBD pledged support for brand-led exports and a “Made in Pakistan” identity. Beekeeping Modernisation: Pakistan’s first high-tech automatic beeswax foundation sheet unit was inaugurated at NARC to boost quality and local production. Regional Security: Pakistan, Saudi Arabia and Turkey activated the Mecca defence pact in response to Houthi attacks, with further strikes targeting Saudi airports and energy sites.

Power Crunch: Pakistan’s electricity shortfall has deepened, with the overall deficit crossing 4,000MW and load-shedding stretching to 3–4 hours in many areas, including Lahore where demand is said to outstrip supply. Winter Gas Security: PM Shehbaz ordered uninterrupted gas imports and a winter load-management plan, prioritising domestic consumers while allocating RLNG for power and industry, alongside a public awareness push for alternative heating. IMF Fuel Subsidy: The IMF has conditionally approved Pakistan’s fuel subsidy plan but wants it kept limited to smaller vehicles and also pressed for sugar-sector deregulation. Mobile Tariffs: PTA data shows mobile data costs remain steep, with hybrid bundles and high-volume packages priced far beyond many low-income users. AI Push: Pakistan showcased AI innovations at AI Everything Global 2026 in the UAE, highlighting local tech firms under the PSEB pavilion. Energy Route Risk: Pakistan plans to secure three LNG cargoes from Qatar in October amid Strait of Hormuz uncertainty, while preparing contingency steps. Diplomacy: UN chief Guterres praised Pakistan as a trusted mediator between the US and Iran, urging an end to the Middle East war. Mecca Defense Alliance: Saudi Arabia, Pakistan and Turkey agreed to activate collective defense commitments amid the Yemen Houthi offensive. Competition Watch: CCP cleared Fatima Fertilizer’s acquisition of Agritech shares, reviewing overlaps in urea and SSP fertiliser markets. Trade Talks Glitch (Region): Reuters reports India-US trade talks have hit a “plateau,” with a final deal still elusive. Protest Logistics: Pakistan’s information ministry denied Islamabad road closures ahead of PTI’s planned long march, saying containers were placed only as precautionary security measures.

Red Sea Security: Saudi-backed Yemeni forces pushed Houthis back along the Bab el-Mandeb coast, with claims Mocha was retaken, while Houthis said they struck Riyadh’s King Khalid airport and Aramco facilities—raising fresh risks for shipping and energy flows. Collective Defence: Pakistan, Saudi Arabia and Türkiye moved to operationalise the Mecca defence alliance, with troop deployment commitments amid the Yemen escalation. Livestock Exports Push: PM Shehbaz approved duty-free livestock imports for specialised export farms, plus corporate restructuring and a modern tagging system to boost overseas sales. Thar Energy Drive: Bilawal Bhutto inaugurated Thar coal expansion and a coal drying unit, calling Thar’s development model replicable nationwide. Power Sector Pricing: NEPRA reviewed an incremental consumption tariff for industrial and agricultural users after cost pressures, with a potential revision on the table. Privatisation Watch: Pakistan’s Privatisation Commission advanced GEPCO sale steps by prequalifying nine parties. Business & Industry: FPCCI warned the widening trade deficit is draining forex reserves; Faisalabad pushed its circular-city textile waste recycling plan for EU compliance; PISMA elected Khalid Tawab unopposed; LCCI pledged faster issue resolution for industrial clusters. Health & Youth: YPAP urged an immediate ban on vape/e-cigarettes over toxicity concerns. Markets: PSX slid sharply on political noise as PTI’s Islamabad march plans continued.

Middle East Energy & Security: Saudi-led forces push against Houthis near the Bab al-Mandeb trade route as Riyadh intensifies Yemen operations; Pakistan’s possible defensive role inside Saudi Arabia is again in focus, while Aramco warns global oil stockpiles are “scarily thin” after attacks hit key facilities and pipelines. Iran-US Diplomacy: Iran says it is reviewing a US seven-day proposal and reiterates Hormuz reopening depends on its seven conditions, keeping shipping and fuel-risk concerns alive. Pakistan Markets & Politics: PSX slid 2,288 points amid political tensions after PTI talks with the government failed and a long march threat returned; falling oil prices didn’t fully calm sentiment. Trade & Industry Pressure: FPCCI flags a 15% jump in 1QFY27 trade deficit to $10.8bn, blaming high cost of doing business, capacity charges and petroleum levies. Power Sector Cost Burden: Capacity payments exceeded generation costs, with Rs1,565bn paid vs Rs1,167bn for electricity generation—raising pressure on bills. Fuel Relief & Household Impact: A petrol relief scheme targets vulnerable two- and three-wheeler users with weekly Rs500 via tokens. Food & Agriculture: FAO warns Pakistan’s food system can’t deliver healthy diets for over 60% of people; global rice prices rose 9.5% in September. Connectivity & Logistics: Kazakhstan, Uzbekistan and UAE back a rail corridor to Pakistan’s seaports; Iran says about 12,000 Iranian containers are stranded in Pakistan due to transfer restrictions. Education & Human Capital: THE World University Rankings 2027 show no Pakistani university in the top 400, with top local institutions clustered outside the elite band. Digital Payments: Easypaisa-linked transactions face disruptions across multiple payment firms, prompting wider scrutiny of digital channels.

Digital Payments: 1LINK expects payment transactions to top 12bn in 2026, with throughput nearing Rs90tn, as it reports strong 2025 growth across its rails. Energy Security: Petroleum minister says govt is fully focused on uninterrupted energy supplies, including advance planning for winter gas and LPG availability. Agriculture Finance: SBP flags insurance gaps, lack of accredited warehouses and limited finance access as key blockers to farm lending, pushing for a better ecosystem. Farm Prices Pressure: Kissan Board Pakistan demands immediate wheat and sugarcane support prices (Rs5,000 and Rs700 per 40kg) warning of protests if delayed. Textiles & Power Costs: Industry dialogue highlights that affordable, reliable and sustainable energy is central to textile competitiveness amid stricter global buyer requirements. Wood Imports: APTTA seeks permission to import wood logs with bark, plus lower PPRO charges, arguing current rules hurt quality and value. Transport & Women Mobility (KP): KP launches Pink Bus Service for women and expands solarised BRT depots, aiming to cut emissions and improve access. Industrial Safety (Karachi): Major garment factory blaze in SITE brought under control after four hours, with no casualties reported. Trade Balance: UBG warns Pakistan’s trade deficit hit $10.8bn in Q1, urging export push and lower production costs. Road PPP (Punjab): CM Maryam Nawaz launches five road projects under PPP, shifting operations to private firms with toll-linked maintenance.

Hormuz Standoff: Iran says the Strait of Hormuz will stay closed until the US meets seven conditions under the June Islamabad memorandum, warning diplomacy while keeping military readiness on the table—after a fresh tanker attack raised shipping-risk concerns. Regional Security & Logistics: Reports claim Pakistan has deployed 30,000–40,000 troops to Saudi Arabia for border defence and interception support, as Riyadh weighs action against Houthis and Iran warns Yemen escalation could worsen the region. Political Tension in Islamabad: Government-PTI talks to avert Imran Khan’s Oct 4 long march collapsed in deadlock over access to the jailed leader, with Islamabad blocking key routes using shipping containers. Infrastructure Push: NHA completed 100% land acquisition for the Sukkur–Hyderabad M-6 motorway after Rs15.26bn payments, clearing the way for construction progress. Labour & Industry: ILO DG Gilbert Houngbo will visit Pakistan Oct 6–9, meeting top officials and industry stakeholders, including a trip to Gadani shipyards. Education Access: AIOU Autumn 2026 admissions are open with the Oct 5 deadline. Energy Transition: Solar power adoption is accelerating across Pakistan as households and small businesses seek self-generation and lower reliance on conventional supply.

Port Facilitation: Pakistan’s Maritime Affairs minister ordered faster work on a Karachi “one-door” facilitation centre so port businesses can access government services under one roof. Tax & Compliance: FBR made a Production Monitoring System mandatory for manufacturers of specified taxable goods, to be installed only via authorized vendors. Auto Industry Pressure: Auto parts makers (Paapam) asked PM Shehbaz for an urgent meeting over the Auto & Auto Parts Policy 2026-31, warning against finalising it without real industry consultation; meanwhile used car imports jumped to 2,276 in September, raising fears of lost local parts production. Exports & Agriculture: Pakistan will export an extra 70,000 tonnes of rice to Malaysia (Oct-Dec 2026); cotton arrivals rose 5.39% YoY to 3.208m bales by Sept 30. Energy & Environment: World Bank rated Sindh Solar Energy Project “moderately unsatisfactory” due to unfinished utility-scale plants; Lahore’s air quality worsened despite Pakistan’s improved overall environmental ranking. Markets: PSX ended the week below 170,000 amid weak sentiment and macro worries.

Blue Economy: A World Bank-backed push frames Pakistan’s ocean economy as a growth engine, citing the sector’s $2.85tn value (2024) and fast expansion via ports, shipping, fisheries, marine energy and tourism. Inflation & energy costs: Pakistan’s inflation eased to 10.3% in Sept 2026, but households still feel pressure as electricity and fuel-driven costs keep energy inflation high. IMF auto policy talks: Pakistan and the IMF remain at odds on the draft Auto Policy 2026-31, with the Fund seeking more data before cabinet approval; EV and hybrid tax proposals are on the table. Port & maritime facilitation: Karachi’s maritime ministry plans a “one-door” facilitation centre to streamline port-related services, alongside steps to simplify ship and fishing vessel registration. Karachi water infrastructure: Bilawal Bhutto to inaugurate the TP-1 sewerage treatment plant, targeting treated wastewater supply for industrial use and reducing untreated discharge. Gold & silver: Gold prices in Pakistan fell sharply as global bullion eased on a stronger dollar and higher yields. Security & logistics disruption: Islamabad’s “Containerabad” continues to disrupt trade and mobility ahead of political protests, with containers used as a blockade measure. Regional defence signals: India’s IAF chief flags a fighter gap and says it may look at alternative platforms if AMCA slips, while Pakistan’s 5th-gen cooperation with China is described as a “cause of worry” in India.

Air Quality Crisis: Lahore is back on top of the world’s most polluted cities list, with IQAir putting its AQI at 167 (“unhealthy”) and PM2.5 far above WHO guidelines, prompting fresh anti-smog steps. Political Tension & Trade Disruption: Ahead of PTI’s Oct 4 long march, authorities’ container barricades and vehicle seizures have disrupted freight flows, with truckers in Karachi reportedly avoiding routes to Punjab/Islamabad. Food Security Watch: Pakistan’s wheat imports are set to rise as flour prices climb; the US FAS says the govt approved up to 1m tonnes for 2026 amid volatility linked to procurement shifts. IMF Pressure on Fuel Relief: Talks with the IMF remain strained over petrol and gas subsidies, with the lender pushing targeted support while the govt seeks continuity for relief. Energy Storage Push: Kohinoor Energy and Hebei Juhang plan a battery manufacturing venture in Pakistan, starting with 50–100 MWh and scaling up, as solar adoption outpaces storage. Public Health Policy: Pakistan launched its National Mental Health Policy 2026–35, citing a ~95% treatment gap and urging mental health services in primary care and schools. Business Voice: FPCCI formed a corporate relations and communications committee to amplify industry concerns, including AI-focused business initiatives.