AGP Executive Report

Energy and Prices: The World Bank expects Pakistan’s inflation to rise to 8.2% in FY2026–27 and warned that a prolonged Middle East conflict could drive up energy costs and imports. The Petroleum Division has asked OGRA to act on suspected LPG hoarding, despite imports meeting domestic demand. Defence Manufacturing: Pakistan, Türkiye, Qatar and Indonesia signed the Badr pact to expand joint defence production, research, technology-sharing and training. Banking: HBL reported Rs115 billion in profit before tax for the first nine months of 2026, with advances reaching Rs2.2 trillion. Export Competitiveness: Exporters raised concerns over energy costs, the captive-power gas levy, infrastructure charges and rising production expenses at a meeting with the commerce minister. The EU also discussed the next GSP+ phase with Pakistan’s textile sector, which accounts for about 70–76% of exports to the bloc. Industrial Investment: Interloop plans to invest $55 million in a dairy-processing plant, while OGDCL has begun hydrocarbon production at an exploratory well in Khairpur.

Defence Manufacturing: Pakistan joined Qatar, Türkiye and Indonesia in the Badr pact, which targets joint production, research, training and stronger defence industries. Energy Costs: Brent climbed above $110 a barrel amid supply fears. Pakistan cut petrol by Rs2.71 per litre but raised diesel by 31 paisa; LPG prices also surged well above official rates. Industry & Exports: Punjab approved a Rs1.995 trillion industrial and export programme, while pharmaceutical exports fell 25.5% in the first quarter of FY27, with disrupted Afghanistan trade weighing on sales. Transport & Auto: Karachi received 179 electric buses from China, while a sharp rise in used-car imports is fuelling concern about pressure on local automakers. Agriculture: Al-Ghazi Tractors posted Rs1.66 billion profit for nine months, as revenue rose 79% and tractor sales jumped 60%.

Defence Manufacturing: Pakistan, Türkiye, Qatar and Indonesia signed the Badr MoU to expand joint military production, training and research. Energy Costs: LPG distributors say consumers were overcharged by more than Rs1.4bn in five days, with market prices at Rs600–625/kg against OGRA’s Rs280 rate; the estimate has not been independently verified. Automotive: Pakistan approved its 2026–31 auto policy, which aims to boost exports and electric vehicles. Trade: Pakistan and the Maldives signed 20 cooperation agreements and set a $200m bilateral trade target for the next two years. Economic Outlook: Pakistan’s FY26 growth estimate was revised to 3.65%, with industrial and services weakness weighing on the outlook. Textile Exports: The EU urged Pakistan to focus on implementing existing GSP+ commitments, a key trade benefit for the country’s textile exporters. Markets: The KSE-100 rebounded 779 points to close at 165,931.

Factory Safety: Karachi garment workers say extreme heat is causing fainting and lost wages, while promised safeguards from global brands remain inadequate. Energy Costs: Brent topped $110 a barrel amid threats to Middle East shipping; Pakistan raised petrol by 88 paisas and diesel by 53 paisas per litre for Oct. 21. Auto Industry: The proposed 2026–31 policy cuts taxes on vehicle imports and sets a 1% sales tax on battery EVs, while a levy on conventional cars is intended to fund export growth. Industrial Outlook: Pakistan’s FY26 growth estimate was revised to 3.65% amid a slowdown in industry and services. Punjab has approved a Rs1.995 trillion industrial and export programme, targeting 162,000 jobs. Manufacturing: Mobile-phone localisation remains stuck at 10%–15%, with industry sources blaming tariffs that make imported components cheaper than locally made parts.

Industrial Outlook: Pakistan’s FY26 growth estimate has been cut to 3.65%, with fourth-quarter growth slowing to 2% as industries contracted. Punjab Investment: The cabinet approved a Rs1.995 trillion industrial and export programme expected to create 162,000 jobs. Corporate Moves: The CCP cleared Lotte Chemical Pakistan’s acquisition of a stake in Engro Polymer & Chemicals, while HUBCO says its BYD plant remains on track for launch by end-2026. Trade Disruption: Pakistan’s suspension of Iran border trade has stranded around 2,000 trucks carrying goods including LPG, rice and fruit, putting supplies and trader earnings at risk. Energy Costs: Gas-sector circular debt stands at Rs3.63 trillion, while the power purchase price could reach Rs27.31 per unit in 2027. Manufacturing Policy: The government is reviewing a five-year auto policy covering tariffs, local parts, exports and electric vehicles.

Industrial Policy: Pakistan and UNIDO agreed to explore cooperation on industrial growth, green energy and technology, as Islamabad pursues export-led manufacturing. Production: Ghani Chem World suspended production after Gulf shipping disruptions hit export orders, but says existing stock can meet domestic demand. Punjab Investment: The provincial cabinet approved a Rs1.995 trillion industrial and export programme, with plans to create more than 162,000 jobs and support industry clusters, value chains and agriculture processing. Growth Outlook: FY2025-26 GDP growth was revised down to 3.65%, with fourth-quarter growth slowing to 2% as industrial activity weakened. Energy Costs: Pakistan’s gas-sector circular debt and supplier payables totalled Rs5.454 trillion by June 2026, adding pressure on businesses already facing high energy costs. Export Concerns: Towel manufacturers warn that exporter suspensions and blacklisting risk disrupting production and shipments in a sector earning about $2.2 billion annually.

Industrial Policy: Punjab approved an industrial development and export promotion scheme to take locally made goods to international markets under a “Made in Pakistan” identity. Funding, incentives and a rollout timeline have not been announced. Economic Pulse: FY2026 growth was revised to 3.65%, with growth slowing to 2% in the final quarter as industry contracted. Power Sector: The government plans to shift some load-shedding from feeders to individual transformers from June, while a new monitoring system targets theft-hit areas. Feeders with losses of 30% or more will still face outages. Trade Disruption: Pakistan-Afghanistan trade fell 74% to $358 million in FY2026 amid border closures, disrupting businesses and transport. Agriculture: The government plans a livestock vaccine plant at NARC and reforms to support meat and dairy exports. Worker Safety: Wazirabad’s cutlery industry is pursuing export growth, but workers report serious respiratory illness linked to years of exposure to metal dust.

Energy Costs: The All Pakistan Business Forum urged greater use of domestic energy to ease power bills and support industrial competitiveness. Generation fuel costs rose to Rs10.02 per unit in September, from Rs7.29 a year earlier. Manufacturing: Large-scale output grew 0.67% year-on-year in August but fell 4.96% month-on-month. Steel and fertiliser production dropped, while the cotton crisis has reportedly shut around 500 ginning units and 150 textile mills, with nearly half of power looms idle. Agriculture: Punjab’s Livestock Card enters its second phase after animal exports rose 43%. But wheat production costs have reached Rs3,761 per maund, and sugarcane farmers threaten protests from November 1 over prices and delayed payments. Investment and Exports: Sindh’s investment drive in Shanghai produced 34 government and business agreements. A Pakistan–Maldives business forum is also planned during President Muizzu’s visit, focused on trade and investment. Climate-smart Farming: Pakistan’s rice sector is exploring carbon finance for methods that could reduce irrigation use and emissions.

Space & Technology: Pakistan aims to land on the Moon by 2035, with its first astronaut set to fly from China on November 25. Officials say space technology can support agriculture, communications and climate monitoring. Trade & Investment: A Pakistan–Maldives business forum during President Mohamed Muizzu’s visit this week will seek new trade and investment opportunities. Border Trade: Pakistan has suspended commercial trade with Iran at two crossings, stranding freight and disrupting shipments of LPG, rice, fruit and other goods. Digital Exports: Freelancers earned a record $197 million in September, taking first-quarter receipts to about $550 million. Industry & Energy: Large-scale manufacturing rose 0.7% year-on-year in August but fell 4.96% month-on-month; telcos warn that power costs threaten investment in 5G and data centres. Healthcare Finance: The Bank of Punjab closed a PKR 17 billion Islamic finance facility for a 250-bed Islamabad hospital, a first for a greenfield hospital project in Pakistan.

Energy Outlook: Finance Minister Muhammad Aurangzeb says Pakistan has supplies through November and will avoid costly spot LNG unless needed, but attacks on Gulf energy sites threaten the economic outlook. Investment: Sindh secured 34 agreements with Chinese and Pakistani firms in Shanghai, while Shanghai Electric was invited to expand into renewables, storage, desalination and coal-based industries. Trade Disruption: Pakistan suspended trade through the Taftan and Gabd-Rimdan crossings with Iran, leaving traders facing losses and uncertainty over when routes will reopen. Electric Vehicles: China’s Yadea is considering a Punjab plant for electric two-wheelers, with the government offering sites in special economic zones. Exports: Pakistan’s first rice festival in Budapest introduced basmati to European importers and chefs, as the government seeks new food-export markets. Small Industry: The government has approved Rs2 billion to support SME revival and modernisation.

Energy Security: Finance Minister Muhammad Aurangzeb says Pakistan has supplies through November, but attacks on Gulf energy infrastructure threaten the longer-term outlook. The government is planning for winter and hopes to avoid costly spot LNG purchases. Karachi Gas: SSGC’s overnight maintenance may cause low pressure in several neighbourhoods and the SITE Industrial Area if work runs late. Minerals: Pakistan is targeting $8 billion in mineral exports, with reserves estimated at $8 trillion; the government says it has awarded no mine contract to the US. Industry & Power: Large-scale manufacturing rose 0.7% year-on-year in August but fell 4.96% from July, with steel, food and chemicals among the weak sectors. The power purchaser has sought a Rs2.56-per-unit tariff increase for November. Trade & Investment: Pakistan aims to lift annual exports to $100 billion by 2035 through trade reforms, while automakers seek an independent review of tariff data. Agriculture: The prime minister has pledged to modernise farming and strengthen food security, as Pakistan seeks closer cooperation with CIMMYT to boost wheat production.

Agriculture: PM Shehbaz pledged to use research, digital tools, improved seeds and irrigation to lift productivity and food security, while Punjab urged timely chickpea sowing. Exports and Tariffs: The government is targeting $100 billion in annual exports by 2035 through trade reforms. Automakers are seeking an independent review of tariff data, warning that flawed calculations could hurt local manufacturing and jobs. Minerals: Pakistan’s estimated $8 trillion in mineral reserves could support annual exports of up to $8 billion, but investment depends on stronger governance, infrastructure and value addition. Manufacturing: Large-scale industry grew 0.67% year-on-year in August but fell 4.96% from July; food, textiles and leather output declined. Investment: Chinese investors are exploring electric bus and truck manufacturing, IT and tourism projects in Punjab. Food Supply: Flour prices have hit record highs as wheat output falls short of demand; millers are urging the government to allow private imports.

Export Finance: At IMF-World Bank meetings, Finance Minister Aurangzeb discussed Sukuk, Panda bonds and infrastructure financing, and stressed export-led growth, IT exports and debt sustainability. Agriculture: PM Shehbaz pledged to boost food security through improved seeds, mechanisation, digital tools and better irrigation, as food prices continue to rise. Digital Business: Mastercard and BankIslami will expand Shariah-compliant card and payment services for consumers and businesses. The PTA says nationwide monitoring is targeting weak mobile coverage and internet service. Investment: Sindh reported Chinese investment and 34 agreements at a Shanghai conference, targeting IT and industrial growth. NBP and PowerChina’s energy-storage arm also agreed to explore green financing. Industrial Upgrading: The government formed technical groups to modernise marble processing, while a Lahore expo showcased garment and textile machinery as exporters seek support. Energy Markets: The Petroleum Division says it wants a transparent, competitive system for allocating local LPG supplies amid concerns about market concentration and winter gas availability. Construction Safety: Authorities ordered inspections of private schools across Khyber Pakhtunkhwa after a Peshawar roof collapse killed 34 children and a teacher.

Industry Modernisation: The Industries Ministry has formed four technical groups to upgrade marble processing, finishing and exports. Experts also urged local electric-stove manufacturing, drawing on solar power and surplus electricity. Export Pressures: Textile and hosiery groups say high energy costs, financing and delayed refunds are undermining competitiveness; PHMA is seeking temporary export support of 6–8%. Lahore’s garment and textile machinery expo has brought together more than 550 companies from 30 countries. Agriculture & Food: SECP proposed a digital national spot market linking farmers with buyers, banks and warehouses to improve prices, finance and storage. Sindh has also launched an embryo-transfer programme to improve livestock breeding. Investment & Manufacturing: Punjab agreed to provide Faisalabad SEZ land for a camel-milk powder plant targeting export markets. Energy & Regulation: IESCO is seeking a 54% tariff increase ahead of its proposed sale, while industrial groups continue to flag power costs and outages. New mandatory 2D medicine barcodes aim to help buyers identify counterfeit drugs. Workplace Safety: Sindh’s labour minister called for stronger enforcement of factory fire and electrical safety laws.

China Investment: Sindh signed 16 MoUs with Chinese firms and is seeking more than two dozen deals across key sectors, while promising stronger security for investors. Economic Outlook: Finance Minister Muhammad Aurangzeb reaffirmed Pakistan’s commitment to completing the IMF programme and called for export-led growth, tax reform and longer-term financing. The IMF projects 3.5% growth and 9.9% inflation in FY27. Industrial Costs: Karachi’s chamber says persistent power disruptions are hurting factory productivity, while export industries oppose a proposed tariff increase. Tax Monitoring: The government set a Dec. 31 deadline for industries to install automated production-monitoring systems, widening FBR oversight. Energy Security: Pakistan has resumed LNG regasification after receiving its first October cargo, as winter supply concerns persist and officials seek alternative fuel sources. Manufacturing Standards: DRAP made 2D barcodes and serial numbers mandatory for registered medicines, aiming to improve traceability and curb counterfeit products.

Industrial Power Costs: Exporters oppose proposed 5–10% electricity tariff increases, warning they would widen Pakistan’s cost disadvantage; industry groups also say power disruptions are hurting productivity. Electric Vehicles: GUGO Motors and China’s Shengtang Group signed an MoU to pursue local electric-bus manufacturing, technology transfer and export-ready production. Agriculture: Wheat seed availability for the coming Rabi season covers just 51% of national requirements, prompting the government to press private suppliers to cut prices and improve distribution. Gemstone Exports: The prime minister has ordered a time-bound action plan to speed up pilot projects and develop value-added mining, cutting and polishing. China Investment: Sindh and China’s Hubei province are exploring cooperation in agriculture, technology, training and trade, while PowerChina has expressed interest in Punjab energy projects. Clean Energy: Battery maker itel Energy is expanding in Pakistan, targeting household storage and commercial and industrial solar systems.