AGP Executive Report

US-Iran Ceasefire & Hormuz Reopen: Pakistan-mediated US-Iran MoU is set for signing in Geneva on June 19, aiming to end military operations on all fronts and reopen the Strait of Hormuz, though Israel’s continued Lebanon posture is a major sticking point. Shipping & Energy Markets: Traders expect oil flow to resume, but analysts warn recovery will take weeks; energy shares slid as uncertainty over “toll-free” access vs Iran’s planned service fees persists. Pakistan’s Role in Diplomacy: Multiple reports credit Islamabad’s mediation (with Qatar) for pushing the breakthrough, with Pakistan’s PM Shehbaz Sharif repeatedly flagging the Geneva signing timeline. Pakistan Economy & Markets: PSX surged about 4,639 points on the deal-driven risk-on mood, while Punjab unveiled a five-year economic roadmap targeting growth, investment and structural reforms. Weather Watch: Met office forecasts thunderstorms, strong winds and rain across several regions from June 16-20, including major cities and northern areas. Social Policy: Balochistan’s women lawmakers moved to fast-track anti-acid attack legislation after a high-profile incident in Quetta.

US-Iran Peace Breakthrough: Pakistan said the US and Iran have agreed to end the war and reopen the Strait of Hormuz, with a memorandum of understanding to be signed in Switzerland on June 19; the pact points to an immediate and permanent halt to military operations (including Lebanon) and a toll-free reopening that should help restore global shipping and ease energy pressure. Markets & Energy Spillover: Oil prices slid sharply (Brent and WTI down around 4–6% in early trading) while stocks rallied from Europe to Asia, as investors priced in lower geopolitical risk and cheaper crude. Pakistan’s Economic Outlook: Finance Minister Aurangzeb flagged upside for FY27 growth and inflation if Middle East spillovers stay contained, after the government’s Rs18.77tr budget set growth at 4% and inflation at 8.2%. Local Trade & Logistics: Karachi Port crossed 2,000 vessel calls for the first time in nearly eight years, with 2,003 ship calls recorded to June 13, reinforcing its role as Pakistan’s trade gateway. China-Pak Industrial Finance: Service Long March Tyres debuted on the PSX after a major IPO, highlighting deeper China-Pak industrial and capital-market integration. Punjab Budget Watch: Punjab is set to present its 2026-27 budget on June 16, with a Rs5.131tr outlay and a reduced development envelope focused on health, education and infrastructure.

US-Iran Peace Talks Under Strain: Trump said a US-Iran framework deal is “very close” and urged Israel/Hezbollah to stand down after Israeli strikes hit Beirut, while Iran’s negotiators questioned US commitment and said talks are still under review; Pakistan is again cited as a key mediator as Qatari envoys push final wording, with the Strait of Hormuz reopening and sanctions relief at the core. Regional Diplomacy: Pakistan and Egypt’s foreign ministers held another call on progress toward a possible US-Iran understanding, as Tehran insists any deal must include a Lebanon ceasefire. Karachi Port Boost: Karachi Port Trust climbed 30 places to 69th in the global Container Port Performance Index, with its CPPI score rising to 45.7, aiming for a top-50 spot by 2027. Punjab Smog Fight: Punjab expanded the “Liquid Tree” project, moving EPA-certified liquid trees from Faisalabad to Lahore and deploying microalgae-based units in public spaces to cut urban air pollution. Baldia Factory Fire Accountability: Labour unions and victims demanded a fresh probe after a Supreme Court acquittal in the Baldia Town case, arguing responsibility still lies with owners and institutions. Shipping/Industry Policy: Pakistan abolished an 18% sales tax on the shipping industry, and also moved to cut customs duties on industrial raw materials and machinery.

US-Iran Peace Push: Trump says a US-Iran framework deal will be signed Sunday and that the Strait of Hormuz will reopen immediately, but Iran’s foreign ministry and hardliners are disputing the timeline, with Tehran saying signing is “not tomorrow” and may come “in the coming days”; Pakistan, acting as mediator, says the final text is ready and Islamabad is preparing for an electronic signing followed by technical talks. Budget 2026-27 Debate: Federal Information Minister Attaullah Tarar defended the FY27 budget and urged opposition to sign a Charter of Economy, pointing to relief measures and reduced export-related income tax; critics, including PPP, call tax targets “very ambitious,” while enforcement penalties for non-compliance are set to rise. Fuel Prices Update: Petrol levy was cut (Rs9.34/l), but diesel levy increased (Rs8.67/l), keeping mixed pressure on transport and agriculture. Agriculture Concerns: Farmers’ groups say the budget lacks a clear, immediate roadmap for productivity and climate stress, despite some research allocations. Carbon Markets Progress: Punjab’s first carbon credit market project is nearing completion, with Phase-II launched at Mehmood Buti landfill, including a 5MW solar park and urban forest plans.

US-Iran Peace Push: Pakistan says the US-Iran war-ending accord is close, with Shehbaz Sharif saying electronic signing is expected within 24 hours, while President Trump claims it will be signed Sunday and that the Strait of Hormuz will reopen “to all” immediately—though Iran’s foreign ministry has urged caution and hinted Sunday signing is unlikely. Strait of Hormuz Shipping: The deal’s core is reopening the key oil route after months of disruption and skirmishes, with demining plans also set to be discussed by Trump at the G7. Nuclear Terms in Focus: Trump frames the pact as a “wall to no nuclear weapon,” while Iran says nuclear-related arrangements would be handled after an initial phase. Pakistan Budget Debate: In Parliament, Shehbaz reiterated equal development for provinces during the budget debate, defending allocations and security steps, as lawmakers pressed for higher wages, a wider tax net, and more support for the poor and agriculture. Tax Administration Update: FBR is considering changes to sales tax invoicing, including an “advance receipt invoice” concept, plus production monitoring and a revised retailer framework, as the Senate Finance Committee reviews compliance reforms.

US-Iran Mediation: Pakistan’s PM Shehbaz Sharif says the US and Iran have agreed “final, agreed upon text” for a peace deal, with next steps being worked out as Iran’s FM Abbas Araghchi says the Islamabad MoU is “never been closer” and could be signed remotely in coming days. Strait of Hormuz Shipping Risk: US CENTCOM reports drones intercepted near Hormuz while traffic remains open, as the wider framework is described as reopening the strait and easing US naval restrictions—key for regional trade and energy flows. Budget 2026-27 Tax Push: Finance Minister Muhammad Aurangzeb frames the FY27 budget as shifting from stabilisation to growth, highlighting abolishment of advance tax and super tax relief for exporters, while FBR plans sweeping revenue measures including GST expansion and higher taxes on retail-packed items and vehicles. Industry Reaction: Business groups welcome some relief but warn the budget lacks a clear manufacturing and export revival roadmap, with concerns over high costs, weak investment, and ambitious revenue targets. Industrial Inputs Relief: Customs duties cut on 7,500+ industrial raw materials, machinery and spare parts, plus full duty exemption on cancer-treatment inputs. Defence & Maritime: Pakistan’s first Hangor-class submarine arrives at Karachi Port, built with China under a transfer-of-technology deal, boosting naval modernisation.

US-Iran Peace Track: Pakistan’s PM Shehbaz Sharif says the US and Iran have agreed the “final, agreed-upon text” to end the war and reopen the Strait of Hormuz, while US officials put the deal at “80–85%” done; Trump, however, keeps contradicting Iran’s leaked terms and warns Tehran to move fast, leaving markets and shipping on edge. Fuel Relief: Pakistan cut petrol by Rs4 to Rs373.78/litre and high-speed diesel by Rs2 to Rs378.78/litre for the June 13 pricing cycle, citing global volatility tied to Middle East tensions. Budget Signals for Industry: Finance Minister Aurangzeb’s FY2026-27 budget raises defence spending (Rs3tr) while limiting development to Rs1tr, and promises tax relief steps like abolishing the “super tax” on exporters and extending the IT Final Tax Regime at 0.25% for freelancers to 2029. Trade & Logistics: Karachi Port’s KGTL dredging completion boosts depth for larger vessels, aiming to cut freight costs and support exports. Consumer/Health Policy: Budget abolishes sales tax on tampons, sanitary pads, condoms and contraceptive medicines. Financial Inclusion: UAE’s CBUAE and the World Bank signed cooperation to expand financial literacy and inclusion.

Budget 2026-27 in Focus: Pakistan’s federal budget for FY26-27 is set to be unveiled today with a “growth and relief” pitch, targeting Rs15.267tr revenue, Rs7.824tr debt servicing, and an export goal of $32.8bn, while proposals include higher petroleum levy collections and possible sales tax changes on imported EVs. Housing & Construction Push: PM Shehbaz ordered faster loan approvals under the Apna Ghar scheme, plus district facilitation desks to fix land documentation bottlenecks—aimed at boosting construction activity and homeownership. Energy & Transport Cost Pressure: Reports say the govt may double the Climate Support Levy on petrol and high-speed diesel in Budget 2026-27, risking another fuel-price shock; meanwhile Punjab has ended temporary free public transport on Orange Line, Lahore Metro Bus and Speedo. Industrial Output: Pakistan’s cement capacity hit 84.58Mt in FY26 with utilisation rising to 60.2%, supported by improved domestic demand. Digital Economy: Economic Survey data points to ICT exports of $3.38bn (Jul–Mar FY26) and smartphone usage reaching 71.6%, with broadband users climbing. Telecom Investment: IT ministry proposes telecom tax relief (withholding tax easing, lower import duties on broadband/telecom gear) to cut operating costs and spur network investment. Auto Sector Shock: Budget proposals may add a carbon levy up to 19.5% on >2,000cc petrol/diesel vehicles, with some premium models flagged for price jumps. Regional Trade Risk: Iran says no final decision on a US-Iran deal despite Trump claims—keeping Strait of Hormuz uncertainty in play for shipping and energy-linked costs.

Pakistan Economic Survey & Growth: Finance Minister Muhammad Aurangzeb said Pakistan’s economy grew 3.7% in FY26, with services up 4.9%, large-scale manufacturing up 6.1%, and agriculture up 2.89% despite floods; remittances are set to cross $41b and FX reserves are above $17b. Agriculture Resilience: The Economic Survey highlights crop recovery led by wheat, rice and sugarcane, while cotton and maize lagged. Housing Finance Push: PM Shehbaz ordered faster approvals under the Apna Ghar Scheme, with loan disbursements reported at Rs11b so far and facilitation desks planned at district level. Energy & Power Sector: Power capacity rose 8.5% to 49,651MW, while electricity consumers saw relief after a cut of Rs1.98 per unit. Banking Digital Payments: Habibmetro Bank selected BPC’s SmartVista to upgrade issuing and payments processing. Pharma Exports Drive: PPMA urged higher foreign-currency retention (to 35%) to help pharma reach $2b annual exports. Shipping & Regional Risk: Amid US-Iran tensions, Trump cancelled threatened strikes on Iran but the naval blockade remains until a deal is finalized; separately, US Navy attacks on merchant vessels near Oman killed Indian seafarers, prompting protests. Defense Modernization: Pakistan’s first China-built Hangor-class submarine arrived in Karachi, boosting underwater capability.

Maritime Security: Three Indian sailors were confirmed dead after a US strike hit the Palau-flagged oil tanker MT Settebello near Oman; India says bodies have been recovered and repatriation is underway, while the incident underscores how Strait of Hormuz tensions can disrupt shipping and energy flows. Budget & Exports: Pakistan’s Budget 2026-27 is set to consider scrapping a 1% export tax to ease liquidity and boost competitiveness, as policymakers also debate who bears the tax burden amid fragile growth. Economic Outlook: The Economic Survey 2025-26 points to missed targets—GDP growth around 3.7% vs 4.2%, inflation pressures (May at 11.66%), and per-capita income falling short—while services and remittances show comparatively better performance. Power Sector Governance: Pakistan established its first public sector Data Governance Council for the power sector, aiming to unify generation, distribution and transmission data to improve planning and investor confidence. Industry & Environment: Punjab launched enforcement against high-polluting industrial units in residential areas of Lahore, while PFA cracked down on illegal animal-fat oil production, discarding 17,400 litres. Water & Food Security: Pakistan’s FO warned India that blocking transboundary water would have “far-reaching consequences,” as the Indus Waters Treaty dispute escalates. Energy Transition: With Hormuz disruption risks rising, renewables are being pushed as a hedge against oil shocks across Asia.

Energy Transition: Pakistan’s shift toward solar-plus-battery is picking up pace as Strait of Hormuz disruptions and regional energy shocks push demand for storage and resilience. Power & Budget: The NEC has approved a Rs 3.669trn national development budget for FY27 with a 4% growth target, while the Economic Survey flags missed agriculture/industry/export targets and a May inflation spike to 11.66%. Industrial Policy: Pakistan is set to raise sales tax on imported batteries and inverters, with solar module prices jumping ahead of Budget 2026-27—raising costs for households and installers. Infrastructure & Trade: CPEC 2.0 is being positioned to unlock new Pakistan-China ventures in agriculture, industry and mining, while Pakistan also extends energy-saving business hours to June 30. Environment & Land: Peshawar High Court orders exact forest boundary determination in Galiyat and Donga Gali, amid disputes over land records and tourism-linked encroachment. Regional Projects: TAPI’s Afghanistan segment construction in Herat is reported 52% complete, supporting cross-border energy trade. Maritime/Logistics: Qatar Airways will resume daily Doha–Philadelphia flights from Aug 1 with Qsuite and Starlink, boosting long-haul connectivity for business travel. Governance & Courts: Pakistan’s Supreme Court acquitted two convicts in the Baldia Town factory fire case, overturning death sentences. Geopolitics Impacting Industry: Escalating US-Iran strikes and threats to hit infrastructure keep energy and shipping risks elevated, with knock-on effects for costs and planning.

Middle East Risk to Trade: Pakistan urged restraint at the UN Security Council as US-Iran tensions escalated after a US Apache helicopter crash near the Strait of Hormuz, triggering US strikes and Iranian retaliatory attacks across Bahrain, Kuwait and claims involving Jordan—raising fears of wider disruption to energy and shipping routes. Energy & Retail Relief: Islamabad extended fuel-saving austerity measures and revised business hours until June 30, keeping standalone grocery/kiryana stores open until 10pm and maintaining earlier retail/restaurant timings to ease cost pressures. Solar for Industry: Cherat Packaging commissioned a 2.7MW solar plant in Khyber Pakhtunkhwa, adding to its existing 1MW to cut costs and support cleaner production. Textiles & Jobs for Women: Punjab launched/expanded “She Threads” with Rs310m for rural women’s textile training, stipends and placement support, targeting employability in garment and quality roles. Telecom Consumer Control: PTA directed operators to let users check and deactivate Value Added Services via simple USSD codes, aiming to reduce surprise recurring charges. Regional Energy Infrastructure: TAPI pipeline construction in Afghanistan’s Herat section hit 52% completion, with 80km laid and progress toward finishing the Herat segment by end-2026. Pakistan’s Innovation Push: Ignite and Mobilink Bank partnered to set up the National Incubation Center in Sialkot, supporting up to 25 startups annually. Refining Investment: SPEC Refinery advanced plans for a $4.5bn deep-conversion greenfield refinery in Balochistan, seeking regulatory approvals to strengthen energy security.

Maritime Security: Pakistan has urged Somalia to secure the swift release of seafarers held hostage after the MT Honour 25 hijacking off Somalia, including 11 Pakistani nationals, with Foreign Minister Ishaq Dar raising the issue in talks with his Somali counterpart. Energy & Trade Infrastructure: Work on the Afghanistan section of the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline has crossed the halfway mark in Herat, with 52% completion and 80km laid, aiming to finish the 130km segment by end-2026. Pakistan-China R&D: A Pakistan-China Joint Research Centre was inaugurated at Shenyang University of Chemical Technology, linking Pakistan’s PIEAS, NED University and UET Peshawar to boost applied research and industry-academia collaboration. Power & Consumer Relief: NEPRA and the government moved to cut electricity prices under quarterly adjustments, offering relief to DISCO consumers in upcoming bills. Industrial Policy: The federal government approved a rightsizing and privatization plan for state entities, including Pakistan Mineral Development Corporation (PMDC), with a 90-day divestment roadmap. Consumer Protection: Reckitt Benckiser Pakistan was hit with a Rs3 crore penalty after regulators ruled its Strepsils marketing misled consumers about the product’s medicinal status. Digital Commerce & AI: A study finds 90%+ Pakistanis use AI for shopping, but trust is low—only 42% would let AI agents complete checkout without humans.

Power Tariffs & Relief: NEPRA cut electricity prices by Rs1.98 per unit for June–August 2026 under the quarterly adjustment, with total consumer relief put at over Rs67bn (including K-Electric). Privatisation Push: PM Shehbaz urged accelerating Discos privatisation with a “robust regulatory framework,” starting with IESCO, GEPCO and FESCO, and said roadshows will target investors from Saudi Arabia, Türkiye and China. SME Export Boost: SMEDA expanded its SME Certification & International Accreditation Grant Programme, offering 70% matching grants (up to Rs800,000 plus consultancy support) to help firms win global certifications. Food Security Move: Punjab approved buying 1 million metric tonnes of wheat from PASSCO to stabilise flour prices, supplying mills at Rs3,300 per maund. Pakistan-China/CPEC 2.0: Officials highlighted a shift from physical CPEC to digital transformation and AI, while reaffirming 75 years of Pak-China friendship. Climate Finance: UK-funded Climate Finance Accelerator (CFA) Pakistan selected 11 climate businesses for investment readiness support. Markets Watch: PSX saw buying return as Iran and Israel signalled a pause, with KSE-100 up over 2,000 points early in trade. Consumer Tech: Airlink launched Hisense in Pakistan, backed by local manufacturing and distribution plans.

Middle East Risk to Industry: Israel and Iran traded strikes again after a US-brokered ceasefire, with both sides saying they’ll retaliate if provoked—raising fears of renewed regional war that could keep energy and food costs under pressure. Trade Policy Shock: The US USTR proposed new Section 301 forced-labor tariffs on imports from 60 economies, including Pakistan (10% or 12.5% depending on country classification), with comments due July 6 and a hearing July 7—an added compliance headache for exporters. Fertilizer Supply Stability: Pakistan’s budget is expected to include Rs 20bn subsidy support for fertilizer firms to clear gas-price arrears and protect urea supply, a key lever for farm input affordability. Water Security: A report warns suspension of the Indus Waters Treaty would threaten South Asia’s water security and agriculture, with data-sharing delays worsening flood preparedness. Pakistan Business & Production: Wahdat Poultry plans to add 100,000 layer birds using IPO funds to expand egg output later in 2026. Energy & Safety Update: OGRA rejected viral claims about LPG cylinder “expiry codes” like A-26/D-26, saying cylinders carry manufacturing and inspection details under safety standards. Local Governance: KP CM Sohail Afridi raised fiscal and constitutional grievances in talks with Ahsan Iqbal, linking development financing to NEC engagement.

IMF-linked Budget Talks: Pakistan is awaiting IMF approval for Budget 2026-27 tax relief, including lower income tax slabs for salaried people, a proposed 2-point cut in super tax, and removal of a 1% advance income tax on exports, while GST hikes are also under discussion for items like solar panels and hybrid vehicles. Energy & Markets: Middle East escalation is pushing oil prices up and rattling the PSX, with the KSE-100 sliding over 1,600–1,900 points amid crude gains and pre-budget uncertainty. LPG Pressure: India’s domestic LPG prices were raised again, highlighting how West Asia disruptions keep cooking-gas costs volatile across the region. Gas Shortage in Sindh: Hyderabad residents report severe gas shortages and low pressure despite announced SSGC supply hours, with complaints of air being released first and inflated bills. Heatwave Risk: PMD warns of an intense heatwave across Sindh, with Karachi expected to hit 39–42°C and upper districts up to 48–51°C, urging SOPs and disaster preparedness. Trade Route Update: Pakistan and Iran have operationalised road links for Central Asian trade via new transit arrangements, aiming to keep cargo moving despite Strait of Hormuz risks. Maritime & Food Safety: Pakistan urged urgent action to protect marine ecosystems on World Oceans Day, while leaders marked World Food Safety Day with renewed focus on safe food systems and enforcement.