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PIA and Norse Atlantic sign a partnership agreement for Boeing 787-9 Dreamliners

PIA And Norse Atlantic Sign Partnership Agreement For Boeing 787-9 Dreamliners

Web Desk / October 10, 2026

Pakistan International Airlines (PIA) has signed a partnership agreement with Norse Atlantic Airways for two Boeing 787-9 Dreamliners, marking a step towards expanding the national carrier’s long-haul operations and strengthening direct air connectivity between Pakistan and the United Kingdom. The partnership also brings together aircraft, crew, maintenance and insurance services under an Aircraft, Crew, Maintenance and Insurance (ACMI) arrangement, supporting PIA’s planned route expansion. Two Boeing 787-9 Dreamliners to Join PIA Fleet The agreement covers two Boeing 787-9 Dreamliners, which are expected to strengthen PIA’s capacity on long-haul routes. According to the airline, the aircraft are scheduled to join its operations in November 2026. Their introduction is intended to help PIA respond to growing demand for direct travel between Pakistan and the United Kingdom. The additional capacity is expected to support flights connecting different points in Pakistan and the UK, offering passengers more travel options and strengthening the airline’s international connectivity. The agreement represents the beginning of PIA’s planned expansion through the addition of the Boeing 787 Dreamliner aircraft. UK Routes Remain a Key Priority for PIA PIA Chief Executive Officer Air Vice Marshal Amir Hayat said the United Kingdom remained an important market for the airline. He said the agreement would help PIA increase capacity on routes where additional seats are needed and provide passengers with greater choice and connectivity. Hayat added that the partnership with Norse Atlantic would support efforts to strengthen PIA’s international network and respond to demand for direct travel between Pakistan and the UK. He also described the introduction of the Dreamliners as a significant development for the Pakistani aviation market, expressing hope that the aircraft would help deliver an improved travel experience for passengers seeking premium services. Norse Atlantic to Provide Aircraft and Operational Support The partnership will provide PIA with aircraft and associated services, including crew, maintenance and insurance, under the ACMI model. This arrangement is intended to enable PIA to increase long-haul capacity without relying solely on its existing fleet for the planned expansion. For Norse Atlantic, the agreement provides an opportunity to redeploy aircraft capacity into new ACMI operations. Eivind Roald, Chief Executive Officer of Norse Atlantic, said the company had been working to move capacity into new ACMI opportunities and that the agreement with PIA represented progress towards that strategy. He said Norse Atlantic was pleased to support PIA’s long-haul expansion and improve connectivity between Pakistan and the UK, particularly for the large Pakistani community living in Britain. Roald also described the arrangement as the beginning of a potential strategic partnership between the two airlines. Partnership Aims to Improve Pakistan-UK Connectivity Direct air links between Pakistan and the United Kingdom are important for passengers travelling for family visits, business, education and other purposes. By adding two Boeing 787-9 Dreamliners to its operations, PIA aims to expand available capacity and offer greater choice to travellers on its UK routes. The partnership could also help the airline respond to passenger demand while supporting broader efforts to rebuild and strengthen its international network. For Norse Atlantic, the arrangement provides an avenue to deploy aircraft and operational resources through ACMI services, creating a commercial opportunity alongside PIA’s capacity requirements. PIA Expansion Marks a New Phase for International Operations The agreement with Norse Atlantic is part of PIA’s effort to expand its long-haul capacity and improve international connectivity. The planned arrival of the two aircraft in November 2026 will be an important next step in the arrangement. Their operational deployment is expected to focus on direct services between Pakistan and the United Kingdom. The partnership brings together PIA’s route network and passenger demand with Norse Atlantic’s aircraft and operational support capabilities. As the airlines move towards implementation, the agreement is intended to provide additional capacity for UK-bound passengers and support PIA’s wider international expansion plans.

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Al-Ghazi Tractors Enters Uzbekistan with First Tractor Exports, Partners with Uzavtosanoat JSC’s AgroTech Klaster

Web Desk / October 10, 2026

Al-Ghazi Tractors Limited (AGTL), the manufacturer of New Holland tractors in Pakistan, has entered the Uzbek market with its first export shipment of 18 tractors and signed a strategic Memorandum of Understanding (MoU) with AgroTech Klaster, a company within Uzbekistan’s Uzavtosanoat JSC. The partnership aims to improve access to reliable and competitively priced agricultural machinery for Uzbek farmers while exploring opportunities for technology exchange, agricultural mechanisation and regional market expansion. AGTL Signs Strategic Agreement in Tashkent The MoU was signed in Tashkent by Yasin Seker, Chief Executive Officer of AGTL, and Ulugbek Matkarimov, General Director of AgroTech Klaster, during a visit by AGTL’s senior delegation to Uzbekistan. AgroTech Klaster operates within Uzavtosanoat JSC, Uzbekistan’s automotive and industrial manufacturing group. The agreement establishes a framework for long-term cooperation in business development, technology exchange, agricultural mechanisation and market expansion. The collaboration is intended to build on the initial tractor delivery and create opportunities for increased business volumes and cross-border trade. For AGTL, the agreement provides an entry point into Uzbekistan’s agricultural machinery market. For AgroTech Klaster, the partnership offers an opportunity to work with a Pakistani tractor manufacturer to widen the availability of agricultural equipment. First Shipment of 18 Tractors Delivered The partnership follows AGTL’s first delivery of 18 tractors to AgroTech Klaster, marking the company’s initial export consignment to Uzbekistan. During a review of the shipment with AGTL’s visiting delegation, AgroTech Klaster’s technical leadership praised the tractors’ build quality and suitability for Central Asian farming conditions. The initial assessment provides both companies with a foundation for developing their commercial relationship and evaluating opportunities for future deliveries. Reliable agricultural machinery is important for improving farm operations, supporting timely fieldwork and strengthening agricultural productivity. Through the partnership, the two companies aim to expand farmers’ access to mechanisation solutions at competitive prices. Partnership to Explore Advanced Agricultural Machinery Beyond tractor exports, the MoU provides for cooperation in business development, cross-border trade and technology collaboration in advanced agricultural mechanisation. The companies will also assess opportunities involving high-technology farm machinery for Pakistan, including cotton pickers and combine harvesters. These discussions could broaden the scope of cooperation beyond conventional tractor sales and support the exchange of agricultural technology between the two countries. The potential introduction of advanced machinery is particularly relevant as Uzbekistan continues to modernise its agricultural sector. For Pakistan, exploring access to such equipment could create opportunities to strengthen farm mechanisation and improve the availability of specialised agricultural technologies. The agreement establishes a basis for evaluating these opportunities, although specific timelines, investment commitments and implementation plans were not disclosed. AGTL Delegation Meets Uzavtosanoat Leadership During the Uzbekistan visit, the AGTL delegation also met Dr Davron Khidoyatov, Deputy Chairman of Uzavtosanoat Group. The delegation comprised Yasin Seker, Chief Executive Officer; Azhar Noor, Chief Commercial Officer; and Mohayuddin Rubbani, Senior Manager Exports. The discussions took place as Pakistan and Uzbekistan continue to develop their trade and industrial relationship. Both sides welcomed AGTL’s entry into the Uzbek market as a practical example of commercial cooperation between the countries. The meetings also identified opportunities for broader collaboration across Uzbekistan and the wider Central Asian region, with an emphasis on expanding access to agricultural equipment and supporting regional food security. AGTL Targets Wider Central Asian Market Commenting on the agreement, AGTL Chief Executive Officer Yasin Seker said the partnership represented an important milestone in the company’s international growth and reflected regional partners’ confidence in its products. He said AGTL looked forward to working with AgroTech Klaster to contribute to agricultural modernisation and create long-term value for farmers across Central Asia. The Uzbek market entry expands AGTL’s export footprint and provides a platform for exploring additional regional opportunities. Cooperation in agricultural machinery could also strengthen commercial links between manufacturers and distributors while supporting the exchange of technical expertise. The initial shipment of 18 tractors and the signing of the MoU represent the first steps in this relationship. Future progress will depend on commercial demand, the development of business volumes and the implementation of potential technology collaborations. Pakistan-Uzbekistan Industrial Cooperation Gains Momentum AGTL’s entry into Uzbekistan highlights the potential for Pakistani manufacturers to explore new markets through strategic partnerships and regional business networks. The collaboration combines Pakistan’s tractor manufacturing capabilities with AgroTech Klaster’s position within Uzbekistan’s industrial sector. Its stated objectives include expanding trade, improving access to agricultural machinery and exploring opportunities for advanced mechanisation. As both countries seek to deepen economic cooperation, the partnership offers a platform for further engagement in agriculture, manufacturing and technology exchange. For AGTL, the agreement marks a new phase in its export journey, while the planned exploration of wider Central Asian opportunities could create additional avenues for Pakistani industrial exports.

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Afghan Border And Coal Costs Squeeze Fauji Cement

Web Desk / October 9, 2026

Fauji Cement Company Limited (FCCL) increased domestic cement sales in FY26, supported by improved construction demand, infrastructure activity and public sector development spending. However, the year ended with a significant decline in exports and rising production costs, as the closure of the Afghan border and higher coal prices put pressure on the company’s operating environment. According to Taurus Securities, total cement dispatches increased by approximately 6% to 5.7 million tons during FY26. Growth was driven by the domestic market, which helped offset the sharp decline in exports. Afghan Border Closure Hits Cement Exports Fauji Cement’s exports declined by approximately 48% year-on-year following the closure of the Afghan border in October 2025, according to Taurus Securities. The disruption affected cross-border sales and reduced the company’s export volumes, making domestic demand increasingly important to overall dispatch growth. Local dispatches reached approximately 5.4 million tons in FY26, representing an increase of around 13%. Better construction demand, steadier infrastructure activity and spending under the Public Sector Development Programme (PSDP) supported domestic sales. Despite the increase in dispatches, Fauji Cement’s market share remained unchanged at 16%. The figures indicate that the company expanded sales in its home market but did not increase its overall share of the domestic cement market. Rising Coal Prices Increase Production Costs Higher fuel and energy expenses emerged as a key challenge for Fauji Cement during FY26. Management attributed the increase in production costs primarily to rising coal prices in the fourth quarter. Coal averaged approximately Rs40,000 per ton during the financial year but has since moved closer to Rs60,000 per ton, including freight costs of around Rs15,000 to Rs16,000. The higher coal price creates additional pressure on cement manufacturing costs, particularly as fuel remains an important input in production. Fauji Cement’s coal procurement mix comprised approximately 75% locally sourced coal and 25% imported coal from South Africa and Mozambique. Management indicated that maintaining this sourcing mix depends partly on geopolitical conditions stabilising. Uncertainty in international markets and supply routes could therefore affect fuel costs and the availability of imported coal. Grid Electricity Adds to the Cost Burden Energy costs remain another concern for the company. Approximately 51% of Fauji Cement’s power comes from renewable sources, while the remaining 49% is purchased from the national grid at an estimated Rs30 to Rs32 per unit. Although renewable energy accounts for about half of the company’s power mix, grid electricity remains a significant expense for the manufacturing operation. Packaging costs appear comparatively less exposed to recent pressures. Polypropylene bags cost approximately Rs30 each, while the company’s own production now covers most of its packaging requirements. As a result, the main cost pressures highlighted by management relate to fuel and electricity rather than packaging. Cement Prices Offer Only Partial Relief Fauji Cement’s retention has reached approximately Rs900 per bag, compared with around Rs870 to Rs875 during FY26. The increase provides some support against rising production expenses. However, the improvement in retention does not fully offset the sharp increase in coal prices. This leaves the company exposed to continued cost volatility, particularly if fuel prices remain elevated or geopolitical developments disrupt supply arrangements. The balance between selling prices and production costs will remain important in determining whether stronger domestic dispatches translate into improved operating performance. Royalty Liabilities Remain a Financial Consideration Fauji Cement has accrued royalty liabilities estimated at Rs7 billion to Rs8 billion. These obligations remain an important financial consideration alongside the company’s rising operating costs. The scale of the accrued liabilities makes their management relevant to the company’s broader financial position, particularly as it navigates higher coal prices and other cost pressures. The timing and treatment of these obligations could influence the company’s financial flexibility, although the available information does not specify a settlement schedule. Foreign-Currency Loan Adds Exchange-Rate Risk The company also borrowed in foreign currency to retire part of its more expensive local debt and finance the acquisition of a stake in Attock Cement. Its holding in Attock Cement now stands at approximately 46%. Management wants to repay the foreign-currency borrowing quickly because of the exchange-rate risk associated with dollar-denominated liabilities. Around Rs6 billion in principal and another Rs4 billion to Rs5 billion in mark-up remain to be paid, according to the information provided. While refinancing costlier local debt and acquiring the Attock Cement stake were key purposes of the borrowing, the remaining obligation exposes Fauji Cement to currency movements. A weaker rupee could increase the local-currency burden of servicing the dollar loan. The repayment of this borrowing will therefore remain an important consideration as the company balances expansion, financing costs and operational requirements. FY27 Outlook Depends on Domestic Demand and Geopolitics Fauji Cement expects domestic cement demand to grow by approximately 8% to 10% in FY27, conditional on geopolitical conditions stabilising. Housing schemes could provide additional support for domestic sales, alongside construction activity and infrastructure spending. However, the outlook remains subject to several uncertainties. The Afghan border situation could continue to affect export volumes, while coal prices and grid electricity costs may place further pressure on production expenses. The foreign-currency loan and accumulated royalty liabilities also remain important financial considerations. Key Risks for Fauji Cement in FY27 Fauji Cement enters FY27 with stronger domestic dispatches but faces a challenging combination of cost and financial pressures. The principal risks include: Fauji Cement’s performance in FY27 will depend on whether stronger domestic demand and improved selling-price retention can offset higher fuel costs and financial risks. For now, the Afghan border situation, coal prices and dollar-denominated borrowing remain the key uncertainties shaping its outlook.

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India Raises Interest Rates After Nearly Four Years

Web Desk / October 8, 2026

India’s central bank has raised its benchmark repo rate by 25 basis points to 5.5%, marking its first interest rate increase in nearly four years as inflationary pressures build alongside continued economic growth. The Reserve Bank of India (RBI) also shifted its monetary policy stance from “neutral” to “calibrated tightening”, signalling that additional rate increases could remain on the table if inflation stays above the central bank’s target. RBI Signals Scope for Further Rate Hikes RBI Governor Sanjay Malhotra said the timing and scale of any further rate increases would depend on actual inflation and economic growth outcomes. The decision represents a notable shift in India’s monetary policy as the central bank attempts to balance persistent inflationary pressures against an economy that continues to expand at a strong pace. The RBI raised its inflation forecast to 5.2% from its previous estimate of 5%. Its forecast for core inflation, which excludes volatile food and fuel prices, also increased to 4.4% from 4.3%. Inflation Moves Further Above RBI Target India’s consumer inflation accelerated to 4.82% in August on a year-on-year basis, moving further above the RBI’s medium-term target of 4%. Rising food and fuel costs are increasingly contributing to broader household expenses, with nearly half of the consumer basket registering inflation above 4%. The latest rate decision indicates growing concern among policymakers that elevated inflation could persist rather than prove to be a temporary development. Higher Rates Could Affect Demand and Investment The 25-basis-point increase is expected to increase borrowing costs across the economy, potentially influencing consumer spending and business investment. The RBI’s shift toward calibrated tightening suggests that monetary policy could remain restrictive if inflation continues to exceed the central bank’s target. For businesses and households, the direction of future interest rates will depend heavily on how quickly inflation moderates and whether economic growth remains resilient under tighter financial conditions. Bond Market Reacts to Rate Hike India’s benchmark 10-year government bond yield increased 5 basis points to 7.2655% following the RBI announcement. The move reflected market expectations of tighter monetary conditions as investors assessed the potential path of future interest rates and inflation. The Indian rupee remained broadly stable at around 96.36 against the US dollar. Indian Stocks Decline After RBI Decision Indian equities also came under pressure following the announcement. The Nifty 50 declined around 0.6%, while the BSE Sensex fell approximately 0.7%. The market reaction highlights investor focus on the potential impact of higher borrowing costs on corporate earnings, consumer demand and investment activity. Inflation and Growth Remain Key Policy Watchpoints The RBI’s decision places greater emphasis on the trajectory of inflation in the coming months. If price pressures remain elevated, the central bank could face continued pressure to maintain or further tighten monetary conditions. At the same time, policymakers will need to monitor whether higher interest rates begin to weigh on economic activity. For financial markets, the balance between inflation control and economic growth is likely to remain a key driver of bond yields, the rupee and equity valuations.

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CCP Authorizes Fatima Fertilizer’s Acquisition of Agritech Shares

Web Desk / October 7, 2026

The Competition Commission of Pakistan (CCP) has authorized the acquisition of shares in Agritech Limited by Fatima Fertilizer Company Limited after completing its Phase-I competition review. The transaction involved two acquisitions through the Pakistan Stock Exchange, with the initial share purchase taking place in 2023 and an additional acquisition completed in 2024. For its assessment, the CCP considered the aggregate shareholding acquired through both transactions. CCP Reviews Fertilizer Sector Competition Fatima Fertilizer Company Limited is a publicly listed company involved in the manufacture, production, purchase, sale, import and export of fertilizers and chemicals. Agritech Limited is also publicly listed and operates in the production and sale of urea and granulated Single Super Phosphate (SSP) fertilizer. Given the importance of fertilizers as a key agricultural input, the CCP examined the potential impact of the transaction on competition, market concentration and the overall structure of Pakistan’s fertilizer sector. Urea and SSP Identified as Relevant Markets As part of its review, the Commission identified urea and SSP as the relevant product markets, with Pakistan considered the relevant geographic market. The CCP assessed the market positions of Fatima Fertilizer, Agritech and their competitors, while also evaluating the potential effect of the transaction on competitive conditions. The review found a horizontal overlap between Fatima Fertilizer and Agritech in the urea market. The combined shareholding and market position of the companies would have resulted in an increase in their combined market share. In the SSP market, however, Fatima Fertilizer had no market share. As a result, Agritech’s position in the SSP market remained unchanged by the transaction. Fatima Fertilizer Divested Agritech Stake During the review process, Fatima Fertilizer informed the CCP that it had divested its entire shareholding in Agritech and no longer intended to pursue control of the company. Consequently, Fatima Fertilizer held no shareholding in Agritech at the time the Commission issued its determination. The subsequent divestment was an important factor considered by the CCP in reaching its final conclusion on the transaction. CCP Finds No Substantial Lessening of Competition Following its competition assessment and taking into account the subsequent divestment, the CCP concluded that the transaction did not pose a risk of substantially lessening competition in the relevant markets. The Commission determined that the transaction did not create entry barriers, significantly enhance the market power of the parties, or create or strengthen a dominant position within the meaning of the Competition Act, 2010. Accordingly, the CCP authorized the transaction under Section 31(1)(d)(i) of the Competition Act, 2010. Importance of Merger Control in Fertilizer Markets The decision highlights the CCP’s role in examining mergers and acquisitions that could alter ownership structures and competitive conditions in important sectors of the economy. Fertilizer markets are particularly significant because urea and other fertilizer products are essential agricultural inputs. Competitive market conditions can have broader implications for agricultural production, farmers and the national economy. The CCP’s review therefore reflects the importance of effective merger control in ensuring that changes in ownership do not adversely affect competition or market dynamics.

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Lucky Core Profit Falls as Exports and Polyester Weaken

Web Desk / October 6, 2026

Lucky Core Industries (LCI) closed FY26 with lower earnings as weaker soda ash exports and pressure on its polyester business outweighed growth in pharmaceuticals and animal health. The company’s financial performance reflected a challenging operating environment, particularly in its chemicals-related businesses, while its healthcare and animal-health segments provided some support. Lucky Core Earnings and Dividend Decline Lucky Core Industries reported earnings per share of Rs21.1 for FY26, down from Rs25.5 a year earlier. The company also reduced its dividend to Rs10.5 per share from Rs13 per share in the previous year. Net sales declined 5 percent to Rs113.4 billion, while profit after tax fell 17 percent to Rs9.7 billion. Operating profit also decreased 18 percent to Rs14.7 billion. The company’s gross margin narrowed to 21.7 percent from 22.9 percent, reflecting pressure on profitability across key businesses. The fourth quarter provided a more positive trend. Profit after tax rose 14 percent year on year to Rs3.2 billion, while the company declared a dividend of Rs5.25 per share. Soda Ash Business Faces Export and Pricing Pressure Soda ash remained one of the biggest drags on Lucky Core’s FY26 performance. Soda ash turnover declined 9 percent, while total volumes fell to 424,000 tons from 452,000 tons a year earlier. Fourth-quarter sales were also weaker, with volumes of 98,000 tons, down 12 percent year on year. Exports suffered the sharpest decline, falling 59 percent during the year. Although local volumes increased 6 percent, the improvement was insufficient to compensate for the loss of export demand. Lucky Core realised approximately Rs88,000 per ton compared with market prices of Rs96,000 to Rs100,000. The lower realisation reflected heavier discounts required to compete with cheaper imported material. Chinese soda ash cargoes averaged around $190 per ton on a cost-and-freight (CFR) basis, adding to competitive pressure in the domestic market. Polyester Margins Come Under Severe Pressure The polyester business also remained under significant pressure. Polyester volumes declined 3 percent to 97,000 tons, while segment operating profit plunged 74 percent to Rs479 million. Cheaper imported fibre put pressure on domestic pricing and margins. Imported fibre landed at approximately Rs330 per kilogram, compared with local prices of around Rs365 per kilogram. The price gap made it difficult for the local business to maintain margins and contributed to the sharp decline in segment profitability. Pharmaceuticals Provide Support Lucky Core’s pharmaceutical business delivered comparatively stronger results during FY26. Pharmaceutical sales increased 5 percent, while operating profit rose 16 percent. The full-year contribution from the Pfizer acquisition helped support the segment, alongside price increases for the company’s non-essential product range. Non-essential products account for around 70 percent of the pharmaceutical mix. However, the closure of the Afghan border continued to affect volumes, which declined 1 percent during the year. Animal Health Business Records Strong Growth The animal health segment also delivered solid growth during FY26. Sales increased 17 percent, while operating profit grew 20 percent, supported by stronger poultry and livestock offtake, increased brand spending and a shift toward higher-margin products. Lucky Core’s new medicine plant has also become operational and is expected to contribute additional volumes going forward. Soda Ash and Float Glass Expansion Projects Remain Paused Weak demand and competition from imports have led Lucky Core to keep its planned soda ash expansion on hold. The proposed 200,000-ton expansion was estimated to require an investment of around $140 million. The company has paused the project because of subdued demand conditions and the threat posed by imported soda ash. The planned float glass project with Tariq Glass has also been suspended. The company continues to face different energy-cost dynamics across its businesses. Soda ash production operated on a 50:50 mix of local and imported coal, while the polyester business used gas comprising 75 percent indigenous supply and 25 percent RLNG. Outlook Remains Mixed for Lucky Core Lucky Core’s FY26 results highlight the uneven performance across its business portfolio. Soda ash and polyester faced pressure from weaker exports, cheaper imports and tighter margins, while pharmaceuticals and animal health delivered growth and helped cushion the overall earnings decline. With major expansion projects currently on hold, the performance of existing businesses, recovery in export demand and competitive conditions in imported chemicals and polyester fibre will remain important factors for Lucky Core’s earnings outlook.

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Pakistan’s Public Debt Rises 340% in 10 Years to Rs86.7 Trillion

Web Desk / October 5, 2026

Pakistan’s public debt has surged by 340 percent over the past decade, reaching Rs86.715 trillion by June 2026, according to official data reported by The Nation. The increase represents a rise of around Rs67 trillion from Rs19.715 trillion recorded in June 2016. The latest figures highlight the rapid expansion of Pakistan’s borrowing over the last 10 years, with the debt stock rising substantially despite efforts to improve fiscal management and reduce financing pressures. Public Debt Climbs from Rs19.7 Trillion to Rs86.7 Trillion Official data showed that Pakistan’s total public debt stood at Rs19.7 trillion in June 2016. It subsequently increased to Rs21.4 trillion in June 2017 and Rs24.9 trillion in June 2018. The debt stock crossed Rs32.7 trillion by June 2019 and reached Rs36.4 trillion in June 2020. It then rose to Rs39.9 trillion in June 2021 before jumping to Rs49.3 trillion in June 2022. Debt continued to increase, reaching Rs62.9 trillion in June 2023, Rs71.3 trillion in June 2024 and Rs80.5 trillion in June 2025. By June 2026, total public debt had reached Rs86.715 trillion, representing a 7.7 percent year-on-year increase. Domestic and External Debt As of June 2026, domestic debt stood at approximately Rs59.4 trillion, while external public debt was recorded at Rs27.3 trillion. In comparison, domestic debt was Rs13.6 trillion and external debt Rs6.1 trillion in June 2016. Separately, the Ministry of Finance’s Annual Debt Review reported total public debt at Rs86.72 trillion at the end of June 2026. It said the public debt-to-GDP ratio declined to 68.3 percent from 70.6 percent a year earlier. The government’s debt position therefore reflects two simultaneous trends: a continued increase in the absolute debt stock and an improvement in the debt-to-GDP ratio during FY26. Debt Accumulation Accelerates in Recent Years The official year-wise figures show particularly strong increases in the debt stock after 2021. Public debt rose by nearly Rs9.4 trillion between June 2021 and June 2022, followed by an increase of Rs13.6 trillion in the following year. The stock then climbed by more than Rs8 trillion in each of the next two years before reaching the latest Rs86.7 trillion level. The Ministry of Finance has separately reported that total public debt increased 76 percent between June 2022 and June 2026. This reflects the difference between the longer 10-year comparison and the more recent four-year period. Rupee Depreciation Adds to Debt Pressures The report also highlighted the relationship between borrowing and the exchange rate. According to the data cited by The Nation, the Pakistani rupee depreciated by 166 percent against the US dollar between June 2016 and June 2026, while public borrowing increased at a faster pace over the same period. Exchange-rate movements are particularly relevant to Pakistan because a substantial portion of public debt is denominated in foreign currencies. Changes in the rupee’s value can therefore affect the domestic-currency cost of servicing external obligations. External Debt Exposure Across Provinces The federal government holds 84 percent of Pakistan’s external public debt, while provincial and sub-national governments account for the remaining 16 percent. Among the provinces, Punjab is the largest borrower with $6.40 billion, followed by Sindh with $5.62 billion and Khyber Pakhtunkhwa with $2.97 billion. Balochistan’s external debt stood at $390 million, while Gilgit-Baltistan and Azad Jammu and Kashmir accounted for $69 million and $180 million respectively. Government Debt Management Remains a Key Challenge The government’s latest debt-management strategy places greater emphasis on longer-term domestic borrowing, fixed-rate instruments and diversification of the debt portfolio. The Annual Borrowing Plan for FY27 projects gross financing needs of Rs28.647 trillion, equivalent to around 20 percent of GDP. The government plans to raise Rs6.046 trillion through additional domestic borrowing and Rs813 billion through external borrowing for the year. The Ministry of Finance has also highlighted the development of Shariah-compliant Sukuk markets, retail instruments and longer-term bonds as part of efforts to improve the structure of public debt. Debt Burden Remains Central to Fiscal Policy Pakistan’s public debt has expanded sharply over the past decade, although the latest debt-to-GDP ratio has improved. The Annual Debt Review reported that interest expenditure fell 22 percent during FY26 to Rs6.948 trillion, while the federal fiscal deficit declined to Rs4.763 trillion from Rs7.089 trillion a year earlier. The federal primary surplus also increased to Rs2.185 trillion. These improvements point to stronger fiscal consolidation in FY26, but the size of the overall debt stock means borrowing requirements and debt servicing will remain important considerations for fiscal policy.

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K-Electric Dispute Emerges As Key Circular Debt Issue

Web Desk / October 4, 2026

The federal government has told the International Monetary Fund (IMF) that its dispute with K-Electric is contributing to financial pressures in Pakistan’s power sector as authorities work to address a circular debt stock of Rs1.675 trillion. The payment and tariff dispute has emerged as one of the issues being examined as Pakistan seeks to improve financial flows and contain the accumulation of liabilities across the electricity sector. K-Electric Payment Dispute Under Review The Power Division attributed part of the Rs61 billion increase in circular debt during the last fiscal year to the payment dispute involving K-Electric, alongside the impact of lower-than-budgeted subsidies. The dispute centres on payments for electricity purchased by K-Electric from the federal power system. K-Electric has withheld some payments over outstanding claims related to tariffs and subsidies, creating additional pressure on financial flows between the company and the federal power system. The government has indicated that it is willing to clear more than Rs100 billion in claims raised by K-Electric, subject to the resolution of tariff-related issues. Tariff Dispute Adds to K-Electric Uncertainty The tariff dispute remains unresolved. The National Electric Power Regulatory Authority (Nepra) and its tribunal rejected K-Electric’s plea seeking a tariff of Rs40 per unit and approved a rate of Rs32.37 per unit. According to sources familiar with the discussions, the government expects K-Electric to challenge the decision in court. The tariff issue is significant because the outcome could affect the settlement of outstanding claims between K-Electric and the federal power system. IMF Examines Future Electricity Tariff Structure The IMF has also examined how electricity tariffs would operate following the planned privatisation of other distribution companies. Under Pakistan’s existing uniform tariff system, consumers served by different distribution companies are generally charged the same tariff, while government subsidies help bridge differences in the underlying cost of electricity supply. The arrangement is now under scrutiny as the government considers changes in the ownership and management structure of distribution companies. Uniform Tariff Policy Under Review The IMF has questioned whether the uniform tariff policy will continue after distribution companies are privatised. Ending the uniform tariff structure could reduce the government’s subsidy burden by allowing tariffs to more closely reflect differences in the cost of electricity distribution. However, the government has yet to provide a clear position on how the tariff system would operate under a broader privatisation framework. The issue also has implications for consumers because changes to the uniform tariff mechanism could alter the way electricity costs and subsidies are distributed across different regions. Government Reports Rs110 Billion in Provincial Arrears Separately, the government has informed the IMF that a mechanism has been agreed to recover more than Rs110 billion in provincial electricity arrears. The proposed mechanism involves deductions from provincial shares under the National Finance Commission (NFC) award. Around Rs110 billion has reportedly been reconciled, while nearly Rs50 billion is expected to be recovered in the near term. However, implementation could face resistance if provinces do not provide the necessary authority for deductions from their allocations. Smart Meters Planned to Improve Billing The Power Division is also installing smart meters as part of efforts to improve billing accuracy and reduce disputes involving provincial governments. More accurate metering could help identify electricity consumption, improve billing and strengthen the process for reconciling outstanding amounts. The initiative forms part of broader efforts to improve financial discipline across the power sector. Circular Debt Remains a Major Power-Sector Challenge Pakistan’s power-sector circular debt reflects accumulated financial obligations arising from factors including delayed payments, tariff differences, subsidies and other gaps in the electricity supply chain. The Rs1.675 trillion circular debt stock remains a significant financial issue for the government and the power sector. The K-Electric payment dispute adds another layer to these challenges because unresolved claims can delay payments and affect liquidity throughout the electricity system. K-Electric Dispute and IMF Discussions The K-Electric dispute is therefore linked to broader discussions with the IMF over Pakistan’s power-sector finances. Resolving outstanding tariff and payment claims could help improve financial flows between K-Electric and the federal power system, while decisions on the uniform tariff structure and provincial arrears will determine how some of the sector’s wider financial pressures are addressed. For K-Electric, the outcome of the tariff dispute and the settlement of outstanding claims remain important issues as Pakistan continues efforts to contain circular debt and strengthen the financial sustainability of its power sector.

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Khaadi Plans Up To Rs8.3 Billion Share Sale Next Month

Web Desk / October 3, 2026

Khaadi Pakistan Ltd. is preparing for an initial public offering (IPO) next month, with plans to raise between Rs6.2 billion and Rs8.3 billion to finance the expansion of its retail network. The fashion retailer intends to use the proceeds primarily for opening new outlets, keeping the proposed capital raise focused on expanding its existing clothing and retail business. Khaadi Moves Toward Pakistan’s Capital Market Khaadi is a subsidiary of Weaves Corp., the parent company in which the International Finance Corporation (IFC), a member of the World Bank Group, holds a minority stake. Pakistan remains Khaadi’s primary market, while the company also operates retail stores in the United Arab Emirates, the United Kingdom and the United States. The proposed listing would therefore give investors exposure to a Pakistani fashion retailer with operations extending beyond the domestic market. Arif Habib Ltd. is serving as the financial adviser for the proposed transaction. Khaadi’s Position in the Consumer Market Khaadi has established itself as a prominent name in Pakistan’s fashion and retail sector. In May 2024, the company was named Retail Brand of the Year at the Hum Style Awards, adding to its profile within the consumer market. The proposed IPO would provide a different test for the brand, as the company moves toward public investors and the requirements of Pakistan’s capital markets. Why the Khaadi IPO Timing Matters The proposed offering comes during a period of increased activity in Pakistan’s IPO market. In June, the Pakistan Stock Exchange said 13 new listings had generated an average return of 47%, which it linked to improving investor confidence. Previous market returns, however, do not determine the eventual valuation or pricing of Khaadi’s offering. The proposed transaction will ultimately be assessed on factors including valuation, financial performance, growth prospects and investor demand. If the offering reaches the upper end of the proposed range, the Rs8.3 billion raise would rank among the larger private-sector fundraising transactions discussed on the exchange this year. Proceeds to Fund Retail Outlet Expansion The primary stated purpose of the IPO proceeds is store expansion. The company is expected to provide greater detail on how the funds will be allocated, including spending on new locations, larger outlets and working capital requirements. Investors will also examine the structure of the offering to determine how much represents fresh capital being raised by the company and whether any portion involves shares being sold by existing shareholders. IFC Stake Adds Another Investor Consideration The presence of IFC as a minority investor in Khaadi’s parent company adds another element for prospective investors to consider. Details surrounding the IFC’s position following the proposed listing will be relevant as the transaction progresses, particularly whether the institution retains its investment or uses the listing as part of an exit strategy. No final conclusion can be drawn on this point until the offering structure and relevant transaction documents are disclosed. IPO Size and Timetable Could Change The proposed Khaadi IPO remains at the planning stage, meaning the final size, price and timetable could change before the book-building process begins. The eventual offer price will be determined through the formal IPO process and investor demand rather than the company’s brand recognition alone. For consumers, the proposed listing is unlikely to immediately alter Khaadi’s retail operations. For Pakistan’s capital market, however, the transaction would introduce a fashion-focused retail business to public investors, adding another consumer-sector name to an exchange traditionally dominated by larger financial, industrial and energy companies. What Investors May Watch As the Khaadi IPO moves forward, investors are likely to focus on several aspects of the offering, including: The final prospectus and formal listing documents will provide greater clarity on these issues once the transaction moves into the public offering stage.

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New KCCI Team to Focus on Infrastructure, Energy, Exports Karachi: Zubair Motiwala

Web Desk / October 2, 2026

Zubair Motiwala Urges New KCCI Leadership to Deliver Results KARACHI: Chairman Businessmen Group (BMG) Zubair Motiwala has called on the newly elected office bearers of the Karachi Chamber of Commerce & Industry (KCCI) to turn their strong electoral mandate into tangible results for Karachi’s business community. Addressing KCCI’s 65th Annual General Meeting, Motiwala said greater support from the business community also carried greater responsibility, expectations and the need for collective, disciplined and measurable action. Talat Mahmood was announced as KCCI President, with Aslam Pakhali as Senior Vice President and Atif Jamil-ur-Rahman as Vice President for the 2026–28 term. Business Community Calls for Collective Action Motiwala said the election result reflected the collective efforts of KCCI members, markets, industrial associations and the wider business community. He congratulated outgoing President Muhammad Rehan Hanif, Senior Vice President Muhammad Raza and Vice President Arif Lakhani on their performance and appreciated BMG members, former office bearers and supporters for their efforts. He urged the incoming leadership to serve all stakeholders approaching KCCI while maintaining the Chamber’s institutional systems and discipline. According to Motiwala, responsibility for performance rests not only with the three office bearers but also with the Executive Committee and committee chairmen. FBR, Energy and Infrastructure Issues Among Priorities The new KCCI leadership is expected to collectively pursue unresolved business issues involving the Federal Board of Revenue (FBR), gas, electricity, water and industrial infrastructure. Motiwala called for evidence-based advocacy supported by facts, documented cases and practical examples. BMG Vice Chairman Mian Abrar Ahmed also proposed appropriate KCCI representation at policymaking forums, including the Sindh Assembly and Karachi Metropolitan Corporation, to strengthen the business community’s participation in decisions affecting Karachi. Karachi Infrastructure and Civic Challenges Highlighted BMG Vice Chairman Anjum Nisar congratulated the newly elected office bearers and called for election commitments to be translated into measurable outcomes. He identified Karachi’s infrastructure, economic, civic, healthcare and education challenges as key priorities and stressed the importance of continuity throughout the two-year term. BMG Vice Chairman Jawed Bilwani also called for collective efforts to address Karachi’s infrastructure, traffic and municipal challenges, saying sustained advocacy would be required to convert longstanding demands into practical action. Industrial Infrastructure Needs Immediate Attention Mian Abrar Ahmed called for focused efforts to upgrade Karachi’s industrial infrastructure, particularly during the initial phase of the new KCCI term. He reiterated his proposal for institutional representation of KCCI at relevant policymaking forums, saying the business community’s perspective should be reflected in decisions affecting Karachi and its economy. BMG Vice Chairman Muhammad Tariq Yousuf said the election result reflected BMG’s collective efforts and continued engagement with the business community. He also urged the new leadership to maintain KCCI’s engagement with the FBR and other authorities on taxation and customs matters while focusing on solutions to business-related challenges. New KCCI President Identifies Key Priorities Newly elected KCCI President Talat Mahmood called for the full support of the Chamber’s membership, saying a united business community would strengthen KCCI’s voice. He identified infrastructure, law and order, traffic, gas and electricity as major challenges facing Karachi’s business community. Mahmood pledged to work with BMG leadership and relevant authorities to address these issues. He also proposed a technical mechanism to monitor traffic congestion on a daily basis. Karachi’s Voice to Remain a Key Focus Talat Mahmood said strengthening Karachi’s voice would be a major focus during the first six months of his tenure. He said issues would be followed through until practical action was taken rather than stopping at assurances. The new KCCI president also highlighted the need for continued engagement with the FBR, pointing to regular interaction between tax officials and the business community and the establishment of the PRAL office in Karachi as facilitation measures. Exports, Investment and Cost of Doing Business Mahmood said particular attention would be given to small traders and called for stakeholder consultation before decisions affecting market timings. He also emphasized the need to contain energy-related costs, reduce the cost of doing business, increase exports and facilitate foreign investment. The new Executive Committee, he said, should focus on genuine service rather than ceremonial activities, with performance measured through tangible results. Outgoing KCCI President Pledges Continued Support Retiring KCCI President Muhammad Rehan Hanif congratulated the incoming office bearers and thanked BMG leadership, outgoing office bearers, the Executive Committee and KCCI staff for their support during his tenure. He paid tribute to Chairman BMG Zubair Motiwala for his confidence and guidance and assured the incoming team of his cooperation. Hanif also pledged to remain committed to BMG and Karachi’s business community following the completion of his tenure.

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