Morning News: IMF appreciates ongoing reforms in judiciary - By WE Research

Feb 12 2025



  • The IMF delegation, led by Joel Turkewitz, met with Pakistan's Chief Justice Yahya Afridi to discuss the judiciary's role in maintaining legal stability and ongoing reforms aimed at enhancing governance and accountability. The Chief Justice highlighted efforts to improve judicial performance, judicial accountability, and the restructuring of the Judicial Commission of Pakistan (JCP), while reaffirming the judiciary's independence. He also outlined the integration of the judiciary with a parliamentary committee for more transparent judicial selection, ongoing reforms to address commercial disputes, and measures to protect foreign investment. The discussions also focused on judicial accountability and the upcoming National Judicial Policy Making Committee (NJPMC) meeting. Furthermore, the Chief Justice addressed concerns raised in Imran Khan's letter, which is being reviewed by the constitutional committee, and emphasized the commitment to improving the judicial system, including setting up permanent benches for criminal cases.
  • The President of Turkiye, Recep Tayyip Erdogan, is visiting Pakistan from February 12-13, 2025, at the invitation of Prime Minister Shehbaz Sharif. He will be accompanied by a high-level delegation, including ministers, senior officials, and business leaders. During the visit, President Erdogan and Prime Minister Sharif will co-chair the 7th Session of the Pakistan-Turkiye High Level Strategic Cooperation Council (HLSCC), where key agreements and MoUs are expected to be signed. Erdogan will also hold bilateral meetings with Prime Minister Sharif and President Asif Ali Zardari, and together with Sharif, will address the Pakistan-Turkiye Business and Investment Forum. The HLSCC, which covers a wide range of sectors like trade, energy, defense, and health, is a critical forum for strengthening bilateral relations between the two countries.
  • As of January 31, 2025, inflows through Pakistan's Roshan Digital Account (RDA) reached $9.564 billion, with $6.052 billion used domestically and $1.711 billion repatriated. However, despite these inflows, Pakistan's foreign exchange needs, particularly for debt servicing, remain far higher. The RDA, launched in 2020 to address treasury bill and Pakistan Investment Bond outflows, has struggled to fully replace domestic bond investments due to ongoing political instability, leading to a lack of trust among overseas Pakistanis. Meanwhile, Pakistan faces a significant challenge with maturing Chinese debt, expected to reach $9 billion by June 2025, and insufficient reserves to repay it. The State Bank of Pakistan (SBP) has also introduced revised buyback rules for government securities, aiming to manage debt and maintain stability in the financial markets.

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AirLink Communication Ltd ((AIRLINK): Innovation unplugged - By Foundation Research

May 27 2025


Foundation Securities


  • We initiate coverage on AirLink Communication Ltd. with an ‘Outperform’ rating and a Dec’25 TP of PKR 273.3/sh, implying a 67.8% upside. AIRLINK has established a strong position in the mobile manufacturing market through the local assembly of prominent brands including Xiaomi, Tecno, and Itel. The company has ambitious plans to expand its product portfolio further by venturing into the manufacturing of laptops, TV’s and EV’s.
  • Our positive outlook on AIRLINK is supported by (1) increasing broadband and smartphone penetration in Pakistan, (2) strategic expansion aided by a 10-year tax holiday, (3) rising market share of low budget smartphones, (4) diversification into laptops and TVs, (5) potential in Xiaomi smartphone exports, and (6) expanding horizons with EV’s. Despite growing competition, the company’s forward looking initiatives position it strongly to capitalize on untapped market opportunities.
  • Increasing broadband and smartphone penetration: Pakistan’s smartphone penetration (31%) is significantly lower than in neighboring India (47%) and other developing countries (avg: 54%) with a GDP per capita close to Pakistan’s. Similarly, smartphone penetration in South-East Asia stood at 79% in 2024, highlighting the gap and growth opportunity in Pakistan. Improved internet access and evolving popularity of social apps coupled with digitalization are likely to keep demand for smartphones robust in the near term.
Pakistan Economy: May-25 CPI likely at 2.7%, base effect wears off - By JS Research

May 27 2025


JS Global Capital


  • Pakistan's Consumer Price Index (CPI) is expected to clock in at 2.7% for May-2025. The base effect is now fading, signalling a return to normalized price trends. This is likely to take 11MFY25 average inflation to 4.7%, down from 11MFY24 average of 24.9%.
  • Due to the rapid disinflation during the year, our base case CPI forecast for FY25 averages 4.6%. The rolling 12-month forward CPI estimate stands at around 5.7%.
  • State Bank of Pakistan (SBP) reduced policy rate to 11% in the last MPC meeting, owing to rapidly declining inflation. A further rate cut of 50-100bps cannot be ruled out in the near future. SBP is scheduled next to meet on 16th June 2025 for its Monetary Policy Committee (MPC) meeting.
Morning News: IMF in disagreement over key targets, subsidies - By Vector Research

May 27 2025


Vector Securities


  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations.
  • Prime Minister Muhammad Shehbaz Sharif said that the bilateral trade between Pakistan and Iran which stood at $3billion would be taken to $10 billion volume in the next few years, as there was immense potential of growth. Prime Minister Shehbaz Sharif on Monday departed to Iran after concluding his two-day official visit to Turkiye.
  • Despite projected remittance inflows of $38 billion in the current fiscal year (FY25), Pakistan’s per expatriate remittance remains significantly lower than that of peer countries. “Although remittances have grown at a compound annual rate of 6.1 per cent from 2013 to 2023, per expatriate remittance remains low in comparison to other countries in the region,” said a report released by the Policy Research and Advisory Council (PRAC) on Monday.
Morning News: Budget features bold measures for ‘strategic direction - By HMFS Research

May 27 2025


HMFS Research


  • Finance Minister Muhammad Aurangzeb on Monday pledged that the upcoming federal budget would introduce “bold measures” to steer the national economy in a strategic direction and make available whatever support is required by the armed forces. Further said that every possible support would be provided to the armed forces, stressing that it was a national need in light of recent cross-border aggression, not just a military requirement. He said the government would ensure simplified tax returns and forms for the salaried class. He said that around 70 to 80 percent of salaried people did not hold equity and fixed-income portfolios. “They receive salaries through bank accounts with tax deducted at source. They should not have to fill in 140-150 data points,” he said, adding that the government aimed to reduce that number to just nine — five for wealth tax and four for income tax. He said the process would now be accelerated, with transactions involving Pakistan International Airlines (PIA), three power distribution companies and some financial institutions expected to reach completion by the end of this year.
  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations. “The budget announcement has been delayed by a week because the Finance Ministry’s figures are still under reconciliation. The IMF has placed a cap on subsidies,” he added. He further noted that the IMF has declined to make any changes to the revised budget figures recently presented to the Fund’s team.
  • The government is seriously considering reducing federal excise duty (FED) on beverages (aerated water) in the coming budget (2025-26) to attract foreign investment in this sector. Foreign investors including Turkish investors have promised more foreign direct investment in beverage sector in case of tax relief in the coming budget (2025-26). Leading global players with Turkish and Korean franchise investors have invested over USD 2 billion in Pakistan since 2018. However, no new investments have been made since 2023 due to the current fiscal environment. The industry contributes over Rs 175 billion in taxes annually (FED, GST, income tax, super tax) - one of the highest taxed sectors.
K-Electric (KEL): Transmission and Distribution Tariff Unveiled All three businesses now will get USD tariff - By Topline Research

May 26 2025


Topline Securities


  • In Seven months after securing dollarized tariff for generation business, the K-Electric (KEL) has also secured dollarized tariff for its transmission and distribution business for 7 years, i.e. from FY24 to FY30.
  • Distribution Business awarded USD ROE of 14%: NEPRA has awarded USD IRR of 14% to KEL for distribution business against requested USD IRR of 16.67%. The USD IRR of 14% translates into PKR ROE of 25.6% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 16.67%.
  • Transmission Business awarded USD ROE of 12%: NEPRA has awarded USD IRR of 12% to KEL for transmission business against requested USD IRR of 15%. The USD IRR of 12% translates into PKR ROE of 21.4% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 15%
Market Wrap: Highlights of the day May 26, 2025 - By JS Research

May 26 2025


JS Global Capital


  • The KSE-100 Index fell 0.8% to an intraday low of 118,150, as investor sentiment weakened due to the government's delay in presenting the federal budget and ongoing uncertainty surrounding IMF fiscal targets. The postponement of Budget 2025–26 and unresolved negotiations with the IMF are driving the risk-off behavior. Market direction remains contingent on clarity from upcoming IMF discussions and the budget announcement; volatility is likely to persist until fiscal policy details are finalized.
Pakistan Economy: OPEC’s aggressive output hike puts Pakistan in a sweet spot - By Insight Research

May 26 2025


Insight Securities


  • OPEC+ is expected to announce another output hike of 411 k bbl/day starting July, according to multiple news reports . During the group’s upcoming meeting on June 1st, members are likely to approve a production increase that is three times larger than the previously planned hike of 137 k bbl/day . If materialized, this move could add pressure to already struggling international crude oil prices, which have been weighed down by a weak global economic outlook.
  • Sources close to the group indicate that larger -than -expected output hike may be part of a broader strategy to bring as much as 2 . 2mn bbl/day back into the market by Nov’25 . The decision is widely seen as an effort, particularly by Saudi Arabia to regain lost market share and push high cost producers out of the market . Notably, Saudi Arabia’s market share has been on a declining trend since 2022 , following OPEC+ production cuts that reduced the cartel’s overall share in global oil supply . KSA’s market share declined even faster than the group’s average . The current strategy also appears to target non -compliant OPEC+ members, with Saudi Arabia leveraging its cost advantage to reclaim share from both shale producers and cartel members who are not adhering to quotas . Additionally, experts suggest a geopolitical angle to the move, particularly in the context of U . S . -Saudi relations . The Trump administration is reportedly keen on lower oil prices to curb inflation and restore market confidence especially due to tariff-induced uncertainty . On the other hand, Saudi Arabia is seeking deeper defense cooperation and has recently announced plans to invest US $600bn in US .
  • We believe that Saudi Arabia aims to capture market share from high -cost producers while maintaining some degree of control on prices through monthly OPEC+ meetings, as highlighted in group’s recent press releases . A sharp price decline would not be in KSA’s interest, especially considering its ambitious development plan .
Pakistan Economy: National Consumer Price Index (NCPI) - By AHCML Research

May 26 2025


Al Habib Capital Markets


  • Inflation in May’25 is expected to clock in at 3.0% YoY, up from 0.3% in Apr’25 and down from 11.8% in May’24, as base effects continue to fade. On a monthly basis, CPI is likely to decline by 0.6% MoM, posting the second consecutive drop, mainly due to a 2.3% fall in food prices amid improved supply of perishables. However, poultry shortages are expected to push egg and chicken prices up by 32.8% and 20.7% MoM, respectively.
  • The transport index is expected to decline by 0.7% MoM due to lower fuel prices, while the clothing and footwear index is projected to rise by 1.2% MoM.
  • On a YoY basis, food inflation is anticipated to ease to 0.9%, but non-food inflation is likely to remain elevated, led by healthcare (+12.5%), education (+10.4%), clothing (+9.9%), and restaurants (+8.4%).
K-Electric (KEL): NEPRA approves Multi-Year T&D Tariff for K-Electric - By Taurus Research

May 26 2025


Taurus Securities


  • NEPRA has approved Multi-Year Tariff for Transmission & Distribution (T&D) network segments of K-Electric for FY24- FY30. Salient features of the multi-year tariff approved by NEPRA are as follows:
  • Control Period: 7 Years, from FY24- FY30.
  • Allowed Debt-to-Equity Ratio: 70:30.
Pak Aluminium Beverage Cans Ltd (PABC): Exports outlook gets weaker; Reiterate Sell - By JS Research

May 26 2025


JS Global Capital


  • We tweak down our CY25E/CY26E EPS estimates for Pak Aluminium Beverage Cans Ltd (PABC) by 9% and TP by 4%. The revision is mainly led by the expected fall in volumes led by border issues with Afghanistan coupled with the upcoming capacity expansions in Central Asia, which may adversely impact PABC’s export prospects to the region. We reiterate our Underperform rating for the stock with a TP of Rs110.
  • Furthermore, any reduction in regulatory duty in the upcoming budget (from 22%-26% currently to 15% or less) given to the local industry, may create pressure on sales volumes from dumping of cheaper products in the country.
  • We consider resumption of dividend payout and announcement of any Capex or investment plan as key triggers for the stock going forward. To highlight, PABC stands at net cash position of Rs10.7bn (Mar-2025).
Morning News: Forex reserves exceed $16bn mark on IMF tranche - By WE Research

May 23 2025



  • Pakistan's foreign exchange reserves rose by $1.034 billion in one week, reaching $16.649 billion as of May 16, 2025, largely due to a $1.023 billion IMF loan tranche under the Extended Fund Facility (EFF). This marks the highest level in four months. While the State Bank of Pakistan’s (SBP) reserves increased, commercial banks' reserves dipped slightly by $9 million. The IMF also approved a $1.4 billion Resilience and Sustainability Facility (RSF) to help Pakistan address climate challenges and support growth. The IMF funds are expected to attract further international financial support, with SBP projecting reserves to exceed $14 billion by June 2025.
  • World Bank Managing Director Anna Bjerde praised Pakistan’s recent economic reforms as a “globally recognised model,” crediting Prime Minister Shehbaz Sharif’s leadership for driving the transformation. During a high-level meeting in Islamabad, Bjerde highlighted Sharif’s focus on sustainable policies, political unity, and development that prioritizes people. She referred to Pakistan’s Country Partnership Framework as the “Pakistan Model,” citing its successful implementation. Sharif thanked the World Bank for its support, especially following the 2022 floods, and noted the partnership will lead to over $20 billion in development investment. Both sides reaffirmed their commitment to continued collaboration.
  • Prime Minister Shehbaz Sharif met with a World Bank delegation led by Managing Director Anna Bjerde to discuss development cooperation and the Country Partnership Framework, which is expected to bring over $20 billion in financing to Pakistan. Sharif emphasized the government’s efforts to fully leverage this investment and thanked the World Bank for its support during the 2022 floods. Bjerde praised Pakistan’s progress on macroeconomic stability and called the partnership a global model, now referred to as the “Pakistan Model.” The meeting reaffirmed strong cooperation between Pakistan and the World Bank, with several senior officials in attendance.
Morning News: $2.5bn surplus in trade with US: Aurangzeb - By WE Research

May 22 2025



  • Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, reported that Pakistan recorded a trade surplus of $2.5 billion with the United States during the current financial year 2024-25 (up to March), with exports at $4.4 billion and imports at $1.9 billion. In the previous year, 2023-24, exports were $5.3 billion and imports $2.2 billion, resulting in a $3.1 billion surplus. Key exports include garments and medical instruments, while major imports consist of cotton, steel scrap, computers, and petroleum products. The U.S. has imposed a 30% reciprocal tariff on Pakistani imports, currently suspended for 90 days, which exporters see as a challenge but also a potential opportunity due to higher tariffs on competitors. In response, the prime minister has formed a Steering Committee and a working group, with the Ministry of Commerce coordinating a comprehensive strategy to engage with U.S. authorities.
  • Gold prices in Pakistan rose significantly on Wednesday, with 24-karat gold reaching Rs349,400 per tola after an increase of Rs6,600, and 10 grams priced at Rs299,554, up Rs5,659, according to the AllPakistan Gems and Jewelers Sarafa Association. The price of 22-karat gold also increased to Rs274,601 per 10 grams. Silver prices followed suit, with 24-karat silver rising to Rs3,466 per tola and Rs2,971 per 10 grams. Internationally, spot gold traded near $3,302 an ounce, up 0.39%, marking its third consecutive daily gain, driven by a softer dollar and heightened safe-haven demand amid global economic and geopolitical uncertainties.
  • Pakistan’s per capita income rose by 9.75% to a record $1,824 in FY2024–25, up from $1,662 the previous year, with the economy’s total size reaching $410.96 billion—a 2.68% annual increase—according to provisional estimates by the Pakistan National Accounts Committee (NAC). In rupee terms, per capita income grew 8.27% to Rs509,174. This growth, driven mainly by a 3.99% rise in the services sector and a modest 1.18% increase in agriculture, helped Pakistan join the world’s 40 largest economies, despite a continued 1.14% contraction in the industrial sector. The NAC also revised earlier quarterly GDP growth estimates and finalized FY23 growth at -0.21% and FY24 at 2.51%. Analysts see the rebound as a sign of resilience amid global and domestic challenges, marking the highest GDP since FY18, when it last approached similar levels before facing economic and political instability.
Morning News: SIFC facilitates $2.3 billion in foreign investment since inception, NA informed - By WE Research

May 21 2025



  • Since the formation of the Special Investment Facilitation Council (SIFC) in June 2023, Pakistan has attracted around $2.3 billion in foreign investment, with the council credited for easing investor hurdles and streamlining processes. Federal Minister Dr. Tariq Fazal Chaudhry linked SIFC's work to addressing regional security issues, including tensions related to Indian proxies. Meanwhile, the Ministry of Climate Change highlighted Pakistan’s top ranking on the 2025 Climate Risk Index due to the catastrophic 2022 floods, which caused significant human and economic losses. In cybersecurity, Pakistan advanced into the top tier of the UN Global Cyber Security Index 2024, attributed to institutional reforms and the creation of a national emergency response team. With over 20,700 registered IT companies, the government emphasized its ongoing commitment to economic stability, climate resilience, and technological growth through global collaboration.
  • Pakistan’s leading oil refineries have pledged over $6 billion in refinery upgrade projects aimed at modernizing the country’s refining infrastructure and ensuring long-term energy security. In a meeting with Federal Minister for Petroleum Ali Pervaiz Malik, refinery CEOs expressed appreciation for the government's resolution of a long-standing sales tax issue, which they said fosters a more investment-friendly and efficient environment. The CEOs reaffirmed their commitment to upgrading facilities to produce cleaner, Euro-V compliant fuels in line with the Prime Minister’s vision for sustainable energy. Minister Malik emphasized policy consistency and government support as key to sector viability and attracting foreign investment. The upgrades are expected to enhance fuel quality, reduce emissions, cut dependence on imports, and contribute to environmental sustainability, forming a central part of Pakistan’s broader energy and economic strategy.
  • Kot Addu Power Company Limited (KAPCO) has announced that the National Electric Power Regulatory Authority (NEPRA) has approved the TriPartite Power Purchase Agreement (TPPA), involving the Central Power Purchasing Agency (CPPA-G), KAPCO, and the National Grid Company of Pakistan. As per NEPRA’s directives in a letter dated May 19, 2025, the signing of the TPPA is contingent upon conducting the Initial Capacity Test (ICT) and Heat Rate Test (HRT). An Independent Engineer will assess and submit the plant's efficiency benchmarks, including Simple Cycle Efficiency and Heat Rate, to NEPRA. Once these steps are completed, the TPPA will become operational, enabling the power plant to commence operations under the new agreement.
Morning News: IMF tightens conditions for Pakistan to get fresh loans: report - By WE Research

May 20 2025



  • The International Monetary Fund (IMF) has imposed stricter conditions on future loans to Pakistan, urging significant economic reforms and warning of risks stemming from U.S. trade policies and rising tensions with India. As part of its agreement, Pakistan must secure parliamentary approval for its next federal budget, implement agricultural tax reforms, and outline a plan to phase out industrial incentives. The IMF also demands timely adjustments in energy tariffs and legislative action to restructure energy sector debt. Despite avoiding default in 2023, Pakistan continues to face economic uncertainty due to high interest payments and global trade disruptions, with the IMF estimating a need for over $100 billion in external financing by 2029. Recently, the IMF disbursed $1 billion and approved an additional $1.4 billion for climate resilience, though geopolitical tensions with India, particularly over Kashmir, pose continued fiscal and reputational risks.
  • During a visit to the Korangi Association of Trade and Industry (KATI), Chief Commissioner Inland Revenue Zubair Bilal announced potential relief for the salaried class in the upcoming federal budget and reiterated the Federal Board of Revenue’s (FBR) zero-tolerance stance on corruption. He encouraged KATI to submit budget proposals for review and assured regular consultations to address industry concerns, emphasizing that business growth directly benefits the national economy. KATI President Junaid Naqi criticized recurring issues such as arbitrary FBR notices, lack of comprehensive policies, and the burden on compliant taxpayers, especially under IMF-driven tax targets. He strongly opposed FBR’s proposed presence in industrial units, citing constitutional violations. Other KATI leaders echoed concerns over tax system inefficiencies and called for digitization, accountability for evaders, and fair treatment of honest taxpayer.
  • Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb reaffirmed the government's commitment to harnessing private sector expertise to drive structural reforms, productivity, and export -led growth during a meeting with a Deloitte delegation. The discussion, a follow-up to earlier talks at the IMF/World Bank Spring Meetings 2025, focused on collaboration in critical sectors like energy, minerals, health, and climate, particularly through the operationalisation of the Country Partnership Framework (CPF). The Minister emphasized Pakistan’s priority areas—climate resilience and population management—highlighting strategic support over financing needs, supported by the recently approved $1.3 billion Resilience and Sustainability Facility. Deloitte expressed support for Pakistan’s reform agenda, and both sides agreed to maintain close coordination to identify high-impact, outcome-based initiatives.
Morning News: Over $1bn received from IMF - By WE Research

May 15 2025



  • Pakistan has received over $1 billion from the IMF as the second tranche under the Extended Fund Facility (EFF), bringing total disbursements under the program to $2.1 billion. This follows the IMF Executive Board’s first review of Pakistan’s economic progress, which also approved a separate $1.4 billion loan under the Climate Resilience Fund. The EFF, totaling $7 billion over 37 months, aims to support economic stability, structural reforms, and investor confidence. The IMF praised Pakistan’s progress despite global challenges, and SBP Governor Jameel Ahmed expressed optimism that foreign reserves will reach $14 billion by June 2025, aided by strong remittances and a current account surplus.
  • In its latest semi-annual review, Morgan Stanley Capital International (MSCI) has added seven Pakistani companies to its Frontier Market and Small Cap Indexes, enhancing the country's presence in global equity markets. Three cement firms—Fauji Cement, DG Khan Cement, and Maple Leaf Cement—have joined the Frontier Markets Index, increasing Pakistan's representation to 26 companies and potentially drawing $5–8 million in passive inflows. Four additional firms were added to the Small Cap Index, while DG Khan Cement was upgraded and two firms were removed. Despite some not meeting minimum thresholds, a buffer rule allowed their retention. This development is seen as a step toward restoring investor confidence following Pakistan’s 2021 downgrade from Emerging Market to Frontier Market status.
  • Yields on short-term government securities in Pakistan dropped by up to 90 basis points in the May 14, 2025 Treasury Bills (T-bills) auction, reflecting market optimism following the State Bank of Pakistan’s recent 100-bps policy rate cut. The auction saw strong participation, with bids totaling Rs 1.987 trillion, led by high interest in 1-month T-bills. The government accepted Rs 664 billion in bids—exceeding its Rs 550 billion target but below the Rs 716 billion in maturing debt. Cut-off yields now range between 11.24% and 11.35% across different tenors. The decline signals positive investor sentiment and expectations of continued monetary easing, although foreign investment in T-bills has reportedly been impacted by the rate cut.
Morning News: Roshan Digital Accounts cross 0.8 million, total funds surpass $10 billion - By WE Research

May 8 2025



  • As of March 2025, the number of Roshan Digital Accounts (RDA) has exceeded 805,000, with over 8,000 new accounts added in the month, and total funds received crossing the $10 billion mark. Launched in 2020 by the State Bank of Pakistan in partnership with commercial banks, the RDA initiative provides Non-Resident Pakistanis (NRPs) and Pakistan Origin Card holders with digital banking and investment services. In March alone, $235 million was added to these accounts. Of the total inflows, $6.368 billion has been used locally, while $1.733 billion has been repatriated, leaving a net repatriate liability of $1.901 billion. The initiative aims to deepen financial inclusion for overseas Pakistanis, enabling them to participate in property, vehicle, stock market, and charitable ventures in Pakistan.
  • In alignment with its commitments to the International Monetary Fund (IMF), the Pakistani government plans to phase out the tax-free status of Special Economic Zones (SEZs) over the next decade, starting with reducing the current tax exemption period to nine years from July 2025. The policy shift includes amending tax laws to eliminate fiscal incentives such as tax breaks and subsidies for companies operating in SEZs. A report by consultancy firm AT Kearney, due by June 2025, will evaluate the fiscal impact and effectiveness of these incentives. Going forward, no new or renewed fiscal incentives will be offered, and existing ones will be gradually replaced with cost-based incentives by 2035, while respecting any binding contractual obligations.
  • In response to rising regional tensions following recent Indian aggression, Pakistan's Finance Ministry held an emergency meeting to assess the country's financial resilience and national security. Chaired by Finance Minister Muhammad Aurangzeb via Zoom, the meeting included top officials from the State Bank, SECP, and Finance Division. Participants conducted a rapid risk assessment of equity, debt, FX, and interbank markets, reaffirming the stability of Pakistan’s financial system and the government’s commitment to business continuity. The meeting emphasized enhanced vigilance, particularly in cybersecurity and communication infrastructure, and reinforced contingency planning. Regular situation reviews were agreed upon to ensure proactive oversight and reassure financial markets and the broader business community
Morning News: Investment drive launched in UK - By WE Research

May 7 2025



  • Muhammad Ali, Adviser to the Prime Minister on Privatisation, and Finance Minister Muhammad Aurangzeb have launched a strategic investment initiative in the UK to attract foreign direct investment and strengthen Pakistan’s global economic ties. During their two-day visit to London, they are engaging with major international financial institutions—including Deutsche Bank, Berenberg Bank, and Amundi Fund Group—to highlight Pakistan’s privatisation roadmap and long-term investment potential. A key feature of the visit is the Pakistan Investors Day, hosted by Jefferies on May 8, 2025, where Pakistan’s economic reforms and investor-friendly agenda will be showcased. The visit underscores the government’s commitment to transparency, economic stability, and private sector-led growth, positioning Pakistan as an emerging destination for global capital.
  • President Asif Ali Zardari reaffirmed Pakistan’s commitment to deepening bilateral ties with Russia, emphasizing expanded cooperation in trade, investment, technology, and people-to-people exchanges. Speaking at the 80th Anniversary of Russia's Victory in the Great Patriotic War, he highlighted the growing momentum in Pakistan-Russia relations and praised recent high-level engagements as a foundation for stronger ties. President Zardari extended congratulations to President Putin and the Russian people, acknowledging their resilience and commitment to peace. He recalled Pakistan's historical contributions during World War II and his own 2011 visit to Russia, lauding Russia's role in promoting regional stability and peace, particularly in easing Pakistan-India tensions. He underscored the importance of continued collaboration for regional and global progress.
  • The recent visit of the US Chamber of Commerce and US-Pakistan Business Council (USPBC) delegation to Pakistan, led by Charles Freeman and accompanied by US Charge d’Affaires Ms. Natalie A. Baker, highlighted growing trade and economic ties between the United States and Pakistan. During meetings with Commerce Minister Jam Kamal Khan, the resumption of US soybean exports was praised as a sign of pragmatic cooperation and deepening agricultural trade, with further potential in the cotton sector. Both sides expressed commitment to enhancing bilateral trade and investment, with Pakistan emphasizing its appreciation of the US as its largest export destination and pledging to improve the trade environment through transparent and fair practices. A 90-day pause in reciprocal tariffs presents a critical opportunity for dialogue and strategy development. The visit underscored the importance of continued engagement to strengthen economic relations, support job creation, and foster mutual growth
Morning News: Key policy rate slashed by 100bps to 11pc - By WE Research

May 6 2025



  • The State Bank of Pakistan's Monetary Policy Committee (MPC) cut the key policy rate by 100 basis points to 11%, citing a sharp drop in inflation due to lower electricity tariffs and easing food prices, bringing the total rate cut since June 2024 to 11 percentage points. Inflation fell to 0.3% year-on-year in April, and core inflation also declined, while real GDP grew by 1.7% in Q2-FY25, driven by improved remittances, a current account surplus, and rising business confidence. Despite some weak industrial segments and agricultural output challenges, the MPC maintained its FY25 growth forecast at 2.5– 3.5% and projected further improvement in FY26, though risks remain from global uncertainty, supply -chain issues, and volatile commodity prices. Foreign exchange reserves are expected to rise to $14 billion by June 2025, and the fiscal deficit is likely to remain on target despite challenges in meeting the primary surplus goal, highlighting the need for sustained reforms in taxation and state-owned enterprises.
  • Efforts are underway to project Pakistan’s real GDP growth at around 3% for FY2024–25, despite low investment and savings rates and weak performance in key sectors. Concerns have been raised over the credibility of this target, especially with contractions in Large Scale Manufacturing (LSM), which declined 1.9% in Jul–Feb FY25, and a significant drop in major crop output, including cotton (down 33%) and maize. Although second-quarter growth was boosted—partly by historically high livestock estimates—reaching 3% would require a nearly 5% growth in the third quarter, which seems unlikely given current sectoral trends. Agriculture remains weak due to water shortages and low crop yields, while multilateral institutions project GDP growth between 2–2.6%. Despite this, internal government bodies, including the Ministry of Planning and Finance, appear eager to portray a higher growth trajectory ahead of the upcoming Economic Survey. The final provisional GDP estimate is expected by May 20, 2025, although independent experts argue growth may not exceed 2% based on the current data trajectory.
  • In April 2025, Pakistan’s overall Business Confidence Index (BCI) rose by 0.4 points to 56.9, according to the latest Business Confidence Survey conducted by the State Bank of Pakistan and IBA, driven by improvements in both the Industry and Services sectors. The Current Business Confidence Index (CBCI), reflecting perceptions over the past six months, climbed 0.9 points to 56, while the Expected Business Confidence Index (EBCI) remained stable at 57.8. The Purchasing Managers Index (PMI) also improved by 0.7 points to 53.5, signaling moderate expansion. Businesses’ inflation expectations rose slightly by 0.2 points to 64.2. Notably, the Expected Employment Index increased by 1.3 points to 55.3, with both industry and services sectors showing gains. Additionally, capacity utilization in the manufacturing sector edged up by 0.4% to 64.8%, indicating a slight uptick in production activity
Morning News: IMF rejects India’s request on Pakistan loans - By WE Research

May 5 2025



  • The International Monetary Fund (IMF) has declined India’s request to reconsider Pakistan’s loan arrangements, with IMF representative Mahir Binici confirming that the Executive Board is scheduled to meet on May 9 to review Pakistan’s current loan program and also consider a proposed new climate financing initiative.
  • The Pakistani government is tentatively setting an ambitious tax revenue target of Rs14.3 trillion for fiscal year 2025-26, up by Rs2 trillion from the current year’s downward-revised Rs12.3 trillion target. This new target, representing 11% of projected GDP, may require Rs500 billion in fresh tax measures in addition to the Rs1.3 trillion already imposed this year. Despite these efforts, the Federal Board of Revenue (FBR) is currently facing an Rs830 billion shortfall, reflecting the economy’s limited capacity to bear more tax without structural reforms. The upcoming budget, expected in early June, is being shaped amid IMF scrutiny, with the Fund visiting Pakistan on May 14 to review fiscal plans. Meanwhile, the government has not finalized its stance on business community proposals, including those from the Overseas Investors Chamber of Commerce and Industry (OICCI), which has advocated for measures like exempting lower income groups, easing tax burdens on compliant taxpayers and businesses, reducing corporate and dividend taxes, and restoring export-related tax benefits. However, many of these are at odds with IMF conditions, complicating fiscal planning ahead of what officials warn will be a “tough” budget cycle.
  • In April 2025, Pakistan’s cement industry recorded a 13.24% year-on-year growth in total cement despatches, reaching 3.342 million tons, driven by a 7.64% increase in domestic sales and a strong 34.56% rise in exports. North-based mills contributed 2.239 million tons, while South-based mills saw a larger growth rate of 27.81%, despatching 1.10 million tons. Despite export gains—especially from the South—domestic sales remained sluggish, with the first ten months of FY25 showing a 5.55% decline in domestic demand and a minor 0.32% dip in total despatches. Exports surged 28.77% during the same period, partially offsetting weak local consumption. The APCMA spokesperson welcomed the export growth but emphasized that one-third of production capacity remains underutilized due to low domestic demand, urging the government to introduce pro-industry policies in the upcoming budget to stimulate construction and boost global competitiveness.
Morning News: SBP buys $5.7bn from interbank market to boost forex reserves - By WE Research

May 2 2025



  • Between June 2024 and January 2025, the State Bank of Pakistan (SBP) purchased $5.677 billion from the interbank market to boost foreign exchange reserves and meet external debt obligations. In January alone, it bought $154 million, a decline from December’s $536 million. Pakistan posted a current account surplus of $1.2 billion in March and a cumulative surplus of $1.9 billion for the first nine months of FY2025, reversing a $1.7 billion deficit from the previous year. Of the $26 billion in external debt repayments due for FY2025, $16 billion is expected to be refinanced, and $8 billion of the $10 billion net payable has already been repaid. SBP Governor Jameel Ahmad highlighted these measures during meetings with global financial institutions, noting the buildup of forex reserves through market purchases and a strengthened external account.
  • Chairman OGRA Masroor Khan informed the National Assembly Standing Committee on Petroleum that Pakistan has sufficient petroleum reserves to meet both domestic and defense needs and is leveraging technology to combat fuel smuggling. The committee, chaired by Syed Mustafa Mehmood, reviewed petroleum quality, smuggling control, and sectoral strategies. OGRA is collaborating with the FBR to implement a track and trace system and has launched a mobile app for fuel quality verification. Pricing mechanisms based on PSO benchmarks and freight margins were scrutinized, with calls for a review. Newly appointed Petroleum Minister Ali Pervaiz Malik stressed institutional reforms, enhanced sector sustainability, and a new gas sector plan amid declining consumption. Smuggling remains a challenge despite enforcement actions, including vehicle seizures and tighter border controls, though issues persist in areas like Attock and Chakwal. Discussions also covered dealer margin increases, LPG supply through an MoU between JJVL and SSGC, and constraints on importing oil from Iran due to IMF and FATF obligations. The committee called for stronger border measures and a detailed briefing from the Ministry of Interior on anti-smuggling efforts.
  • The World Bank has approved $108 million in additional financing for two key development projects in Khyber Pakhtunkhwa (KP), Pakistan, aimed at enhancing rural accessibility and strengthening the tourism sector. The funding includes $78 million for the KP Rural Accessibility Project (KPRAP) to upgrade climate-resilient rural roads, benefiting 1.76 million people, especially in remote and disasterprone areas, with a focus on gender inclusion such as safe school transport for girls. Additionally, $30 million has been allocated to the KP Integrated Tourism Development Project (KITE) to complete road infrastructure to key tourist sites, improve destination management, and support local job creation and heritage preservation. These initiatives are expected to boost access to essential services, climate and economic resilience, and create opportunities for inclusive growth, particularly for women and youth in the province