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SBP Research Agenda 2026-2029: State Bank Unveils Bold Plan to Reshape Pakistan's Economic Future
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SBP Research Agenda 2026-2029: State Bank Unveils Bold Plan to Reshape Pakistan’s Economic Future

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The SBP Research Agenda 2026-2029 is far more than a routine policy document. It is a revealing blueprint that exposes the deep-rooted weaknesses of Pakistan’s economy and lays out how the country’s central bank intends to confront them. At a time when Pakistan continues to grapple with inflation shocks, recurring balance of payments crises, weak productivity, and a narrow financial base, the State Bank of Pakistan has acknowledged that traditional solutions are no longer enough. The newly released three-year roadmap seeks answers to some of the country’s most difficult economic questions while inviting academics, researchers, policymakers, and institutions to help shape future policy decisions. SBP Wants Answers to Why Monetary Policy Often Fails In the foreword to the document, SBP Governor Jameel Ahmad said the objective is to identify factors that weaken the effectiveness of regulations and policy tools so authorities can deliver more timely and informed responses. One of the most striking admissions in the agenda is that monetary policy transmission in Pakistan often works imperfectly. The central bank believes structural problems such as informality, limited financial access, institutional weaknesses, and fragmented markets dilute the impact of policy rate changes. The agenda seeks to understand why some interest rate decisions fail to influence spending, borrowing, and investment as intended. Can Inflation Ever Be Controlled Effectively? A major focus of the SBP Research Agenda 2026-2029 revolves around inflation. Researchers have been tasked with studying whether Pakistan should formally move toward flexible inflation targeting and, if so, how such a framework should be designed. Critical questions include: • What inflation target is realistic for Pakistan?• How wide should the tolerance band be?• How long should policymakers take to achieve targets?• How do supply shocks affect public confidence in the central bank? The document also acknowledges that climate change is emerging as a powerful driver of inflation volatility and can no longer be ignored in economic planning. Digital Currency and Virtual Assets Enter the Conversation In one of the agenda’s most forward-looking sections, SBP raises questions about technologies that until recently remained outside mainstream policy discussions. The central bank plans to examine whether a central bank digital currency could improve monetary policy transmission and what risks expanding digital financial services and virtual asset investments may pose to financial stability. The move suggests Pakistan’s financial authorities are preparing for a future increasingly shaped by technological disruption. Pakistan’s Financial Sector Under the Spotlight The second pillar of the SBP Research Agenda 2026-2029 focuses on financial sector deepening. Despite decades of banking growth, Pakistan continues to face low credit penetration and limited financial inclusion. Banks dominate the financial landscape while capital markets and non-bank institutions remain relatively weak. SBP wants researchers to determine whether these shortcomings stem from temporary economic conditions or deeper structural problems. The agenda seeks evidence on issues such as: • Whether banks are allocating enough credit to the private sector.• How funding structures influence lending decisions.• Whether liquidity management policies discourage deposit growth.• How minimum deposit rates affect economic stability.• How macroprudential tools should complement monetary policy. Islamic Versus Conventional Banks Another notable aspect of the roadmap is its call for a comparative analysis of Islamic and conventional banking models. Researchers will assess their efficiency, pricing mechanisms, credit allocation practices, operational costs, and resilience during financial shocks. The findings could shape future regulatory priorities within Pakistan’s dual banking system. Breaking Pakistan’s Boom and Bust Cycle Perhaps the most consequential section of the document addresses Pakistan’s chronic economic instability. The central bank openly recognizes that the country’s large undocumented economy undermines reliable data collection and weakens policy effectiveness. Research priorities include identifying ways to encourage formalization through: • Tax simplification.• Greater digitalization.• Easier regulatory procedures.• Reduced compliance burdens. The objective is clear. Pakistan cannot sustainably grow while significant portions of economic activity remain outside the formal system. The Big Questions About Remittances and Foreign Investment The SBP Research Agenda 2026-2029 also explores external vulnerabilities that repeatedly trigger economic crises. Researchers have been asked to examine how foreign direct investment, portfolio inflows, and external borrowing affect resilience. One particularly intriguing question stands out: Are workers’ remittances an economic blessing that supports stability, or do they create hidden vulnerabilities over time? The answer could influence future strategies for managing Pakistan’s external accounts. AI, Migration and Climate Transition Shape the Future The agenda extends beyond conventional economics. SBP wants deeper research into export diversification, global value chains, demographic shifts, migration patterns, technological transformation, and artificial intelligence adoption. It also prioritizes understanding the short- and medium-term economic consequences of Pakistan’s transition toward a low-carbon economy. These themes indicate that the central bank is increasingly looking beyond immediate crises and preparing for long-term structural change. A Research Agenda That Reflects Economic Reality The SBP Research Agenda 2026-2029 reveals an institution willing to confront uncomfortable truths about Pakistan’s economic system. By admitting the limitations of existing frameworks and inviting broad collaboration, the State Bank appears determined to replace assumptions with evidence. Whether this ambitious exercise translates into meaningful reforms remains to be seen. However, one message from the agenda is unmistakable: Pakistan’s economic challenges have evolved, and solving them will require fresh thinking, rigorous research, and policies grounded in reality rather than tradition.

NEC Approves Rs3.2t Development Budget as Provinces Agree to Provide Rs920b Grant
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NEC Approves Rs3.2t Development Budget as Provinces Agree to Provide Rs920b Grant

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The National Economic Council (NEC) on Wednesday approved a Rs3.2 trillion national development budget for the next fiscal year after three provinces agreed to freeze their development spending and provide Rs920 billion in grants to the federal government. The decision came amid mounting financial pressures and increased funding requirements for defense and water sector projects. Prime Minister Shehbaz Sharif chaired the NEC meeting, which also approved key macroeconomic targets for fiscal year 2026-27. Development Budget Reduced by 25% The approved development envelope of Rs3.2 trillion is around 25 percent lower than the Rs4.25 trillion initially proposed by the Annual Plan Coordination Committee (APCC) earlier this month. Planning Minister Ahsan Iqbal told reporters after the meeting that provincial governments had agreed to maintain their Annual Development Programmes (ADPs) at the actual spending levels of the current fiscal year. As a result, provincial development budgets have been reduced by Rs920 billion compared with the targets approved by the APCC. The NEC approved provincial development plans worth Rs2.218 trillion and a trimmed Public Sector Development Programme (PSDP) of Rs1 trillion. The revised PSDP is Rs126 billion lower than the amount initially approved. Provinces to Provide Rs920 Billion to Centre According to the new arrangement, provinces will provide a one-time grant of Rs920 billion to help the federal government meet urgent financing needs. The federal government had sought Rs1.2 trillion from the provinces to fund defense expenditures and strategic water projects. Ahsan Iqbal said the Finance Ministry was finalising the mechanism for transferring and accounting for the funds. Prime Minister Shehbaz Sharif thanked the provincial governments for their cooperation and consultations. He said the assistance reflected a collective effort to address national priorities. IMF Chief Briefed on New Fiscal Arrangement Prime Minister Shehbaz Sharif informed the NEC meeting that he had spoken with International Monetary Fund (IMF) Managing Director Kristalina Georgieva regarding the agreement between the Centre and provinces. According to the prime minister, Georgieva appreciated Pakistan’s efforts to create a coordinated fiscal framework. Under the arrangement, the federal government will retain most of the additional revenue generated through the National Finance Commission (NFC) award during the next fiscal year. The arrangement will temporarily reduce the effective share of provinces in the divisible pool, which currently stands at 57.5 percent. Officials said the agreement is contingent upon the Federal Board of Revenue (FBR) achieving its tax collection target. FBR Tax Target Set at Rs15.26 Trillion The FBR has been assigned a tax collection target of Rs15.264 trillion for fiscal year 2026-27. However, the tax authority has missed its targets by a combined Rs2.2 trillion over the last two fiscal years. Government officials said provincial contributions would be treated as grants and would not permanently alter the NFC formula. The provinces have deferred any long-term changes to revenue-sharing arrangements. Punjab Sees Biggest Reduction in Development Spending According to Ahsan Iqbal, Punjab’s development budget has been approved at Rs749 billion, which is Rs701 billion lower than the amount proposed by the APCC. Sindh’s development allocation stands at Rs706 billion, down by Rs110 billion. Khyber-Pakhtunkhwa’s development outlay has been fixed at Rs455 billion, reflecting a reduction of Rs109 billion. Balochistan’s development budget remains unchanged at Rs308 billion. Punjab Chief Minister Maryam Nawaz did not attend the meeting due to recovery from a recent medical procedure. Chief ministers from the remaining provinces participated in the session. Government Emphasises Defense and Counterterrorism Addressing the meeting, Prime Minister Shehbaz Sharif said strengthening national defense remained Pakistan’s top priority. He highlighted the sacrifices made by the armed forces, law enforcement agencies and the people of Khyber-Pakhtunkhwa and Balochistan in the fight against terrorism. The prime minister stressed that cooperation between the federation and provinces had played a key role in maintaining stability and would remain essential in the future. Focus Shifts From Stability to Growth Prime Minister Shehbaz said Pakistan must move beyond macroeconomic stability and focus on economic expansion. He called for policies aimed at increasing exports, boosting manufacturing and generating employment opportunities. Ahsan Iqbal said Pakistan could not continue relying on loans and support from friendly countries. He stressed that the national discourse should now focus on exports, productivity and sustainable economic growth. The planning minister also criticized the federal bureaucracy, describing it as one of the biggest obstacles to development. He said reforms were needed to modernize administrative structures that still operate with a colonial-era mindset. NEC Approves Key Economic Targets The NEC approved a 4 percent GDP growth target for fiscal year 2026-27. Inflation has been targeted at 8.2 percent. The agriculture sector is expected to grow by 3.8 percent, while large-scale manufacturing has been assigned a growth target of 4.5 percent. The industrial sector overall is projected to expand by 4 percent, supported by improvements in manufacturing, mining, construction and energy. Meanwhile, the services sector is expected to grow by 4.2 percent. The NEC approved a savings target equivalent to 14.3 percent of GDP and an investment target of 15 percent of GDP. Current Account Deficit Projected at $3.6 Billion The council approved a current account deficit target of $3.6 billion, or 0.7 percent of GDP, for the next fiscal year. Exports are projected to rise to $32.8 billion, while imports are expected to exceed $70 billion. As a result, the trade deficit is estimated at $37 billion. Remittances are expected to reach $42.3 billion, although officials acknowledged that uncertainties in the Middle East could affect inflows. Quarterly NEC Meetings Planned Ahsan Iqbal said the NEC had largely become a ceremonial body in recent years. He announced that quarterly meetings would now be held to monitor economic targets and development projects more effectively. The NEC also approved 11 reform initiatives aimed at addressing structural weaknesses, increasing exports, improving productivity and strengthening agriculture and human capital development.

Pakistan Fiscal Deficit Falls to 0.7 Percent as Austerity and Revenue Surge Reshape Economy
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Pakistan Fiscal Deficit Falls to 0.7 Percent as Austerity and Revenue Surge Reshape Economy

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Pakistan fiscal deficit has witnessed a dramatic collapse, offering one of the strongest signs yet that the country’s painful economic reforms may finally be paying off. According to the Economic Survey of Pakistan 2025-26, the overall fiscal deficit narrowed sharply to just 0.7 percent of GDP during July 2025 to March 2026. During the same period a year earlier, the deficit stood at 2.6 percent of GDP. For a country long trapped in a cycle of debt accumulation, IMF negotiations, and budgetary crises, this turnaround represents a significant shift in Pakistan’s economic story. The improvement was driven by stronger revenue collection, aggressive austerity measures, lower interest payments, and tighter fiscal discipline at both federal and provincial levels. Pakistan Fiscal Deficit Improvement Signals a Major Shift The latest figures reveal that Pakistan generated a primary surplus of Rs4.09 trillion, equivalent to 3.2 percent of GDP. This exceeded the Rs3.47 trillion primary surplus recorded during the same period of FY2024-25. A primary surplus means the government earned enough revenue to cover all expenditures except debt servicing obligations. Economists often view this indicator as a critical measure of fiscal health. The achievement becomes even more remarkable considering Pakistan’s long-standing reputation for weak tax collection and persistent fiscal slippages. Revenue Boom Changed the Fiscal Equation The government’s success was underpinned by stronger revenue generation. Pakistan’s consolidated revenues climbed to Rs14.79 trillion during the first nine months of FY2025-26, representing a growth of 10.7 percent compared with the previous year. Tax revenues rose by 11.3 percent to Rs10.17 trillion, while non-tax revenues increased by 9.5 percent to Rs4.63 trillion. Federal Board of Revenue collections maintained double-digit growth and crossed the Rs10 trillion mark during the July-April period. However, despite the improvement, the FBR still fell Rs684.4 billion short of the ambitious targets agreed under IMF-supported fiscal reforms. Austerity Measures Delivered Breathing Space The biggest relief came from falling debt servicing costs. Total interest payments dropped by 23.2 percent to Rs4.95 trillion, compared with Rs6.44 trillion during the same period last year. The reduction reflected lower domestic interest rates and improved debt management practices. The federal government also imposed strict spending controls that included: • A ban on the purchase of luxury and non-essential government vehicles.• A freeze on creating new public sector positions.• The abolition of vacant government posts that remained unfilled for more than three years.• Restrictions on publicly funded foreign visits and overseas medical treatments. These decisions helped reduce consolidated expenditures by 4.2 percent despite continued inflationary pressures. Pakistan’s Tax System Undergoes a Structural Transformation Beyond short-term gains, Pakistan’s tax structure is beginning to evolve. Historically, the country relied heavily on indirect taxation, which disproportionately affected ordinary consumers. Now, direct taxes account for 49.3 percent of total FBR revenues, up significantly from 36.5 percent in FY2021. At the same time, indirect taxes declined to 50.7 percent of collections. The provinces also introduced synchronized Agriculture Income Tax legislation, bringing agricultural earnings closer to taxation standards applied to corporations and salaried individuals. This reform has long been considered politically difficult but economically necessary. Provinces Quietly Became Fiscal Heroes One of the less discussed aspects of Pakistan’s fiscal turnaround is the role played by provincial governments. Combined provincial surpluses surged from Rs518.2 billion in FY2024 to Rs921.5 billion in FY2025. Punjab generated the largest surplus at Rs348.5 billion. Sindh more than doubled its reserves to Rs283 billion. Khyber Pakhtunkhwa raised its surplus to Rs176.2 billion. Balochistan maintained stable fiscal discipline with a surplus of Rs113.8 billion. These surpluses strengthened the national balance sheet and supported federal consolidation efforts. Development Spending Was Not Sacrificed Critics often argue that austerity comes at the expense of growth. However, Pakistan attempted to avoid that trap. Development expenditures and net lending expanded by 18.7 percent to Rs1.83 trillion during July-March FY2025-26. Under the Public Sector Development Programme, more than 98 percent of allocations were directed toward completing ongoing projects rather than launching politically motivated initiatives. Infrastructure projects received the largest share of funding, followed by investments in health, education, Special Areas, and the merged districts of Khyber Pakhtunkhwa. Can Pakistan Sustain This Fiscal Discipline? The Pakistan fiscal deficit story is impressive, but the celebration may be premature. The Economic Survey warns that rising geopolitical tensions in the Middle East pose serious threats to these gains. Any sharp increase in oil prices, disruptions to global supply chains, or renewed inflationary pressures could rapidly reverse recent progress. Higher energy costs could force the government back into expensive subsidies, widen debt obligations, and place renewed stress on public finances. Pakistan has demonstrated that fiscal discipline is possible. The real challenge now is sustaining it in an increasingly uncertain global environment. The next few months will determine whether this historic turnaround marks the beginning of lasting economic stability or merely a temporary reprieve in Pakistan’s long struggle against fiscal vulnerability.

GDP expands 3.7%, per capita income rises to $1,901
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GDP expands 3.7%, per capita income rises to $1,901

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ISLAMABAD: Pakistan’s economy expanded to more than $452 billion in the outgoing fiscal year, while growth accelerated to 3.7% — the highest in four years — driven by improvements in manufacturing, services, remittances and fiscal indicators, according to the Pakistan Economic Survey unveiled on Thursday. Presenting the survey ahead of the federal budget, Finance Minister Muhammad Aurangzeb said the economy had demonstrated resilience despite climate-related disruptions, geopolitical tensions in the Middle East and continued uncertainty in the global economy. “We have not only increased the size of the economy but also achieved broad-based recovery,” Aurangzeb said. The survey showed that per capita income increased by 9% to $1,901, reflecting improvements in economic activity and income levels. The services sector emerged as a key driver of growth, expanding by 4.9%, while large-scale manufacturing (LSM) posted a 6.1% increase — its strongest performance in four years. Sixteen out of 22 industrial sectors recorded positive growth during the year. Economic activity also translated into stronger demand indicators, with cement consumption rising by 10%, suggesting a pickup in construction and infrastructure-related activity. One of the strongest contributors to external sector stability remained workers’ remittances, which are projected to exceed $41 billion by the end of the fiscal year. In May alone, Pakistan received remittances worth $4.2 billion, including more than $1 billion from the United Arab Emirates. Aurangzeb acknowledged the support of friendly countries, particularly the UAE, saying the Gulf state had remained a longstanding partner of Pakistan. The finance minister highlighted a marked improvement in Pakistan’s external position, stating that foreign exchange reserves had crossed $17 billion and were expected to exceed $18 billion by the end of June. Total reserves stood at $22.6 billion. The survey further indicated that the agriculture sector grew by 2.89%, supported by a 17% increase in fertiliser sales. Livestock and dairy continued to dominate agricultural output, accounting for around 60% of the sector. Fiscal indicators also showed signs of improvement. The fiscal deficit narrowed to 0.7% of GDP, while the primary balance remained in surplus. Revenue collection by the Federal Board of Revenue (FBR) increased by 10.1%, reflecting efforts to improve tax administration and expand the tax base. According to Aurangzeb, the documented tax base has nearly doubled in recent years, increasing from Rs7 trillion to Rs13 trillion. He added that FBR revenues recorded a 46% increase in June 2026, while overall tax collection rose by 40% over the past two years. Pakistan also posted a current account surplus of $72 million, supported by strong remittance inflows and prudent external sector management. Private sector credit reached $11.57 billion, suggesting improved business confidence and lending activity. On inflation, the minister said recent price pressures were largely linked to higher international oil prices. He noted that while Pakistan’s oil import bill increased by $1 billion in April, the rise was limited to $500 million in May through effective management. The survey showed that Pakistan’s installed electricity generation capacity reached 49,651 megawatts, with thermal sources accounting for nearly half of total capacity, followed by hydropower, renewable energy and nuclear power. Aurangzeb said investor confidence had also strengthened during the year. Around 175,000 new investors entered the stock market, while 11 initial public offerings (IPOs) were completed — the highest number in two decades. Investments under Roshan Digital Accounts reached $12.75 billion. He added that global firms including Aramco, Alibaba, Turkish Petroleum, Veon and Google had expanded their presence in Pakistan, despite some companies exiting the market. Looking ahead, Aurangzeb said economic growth was expected to exceed 4% in the next fiscal year, supported by macroeconomic stability, fiscal discipline and ongoing reforms aimed at broadening the tax base and attracting investment.

BRITISH HIGH COMMISSIONER JANE MARRIOTT VISITS RECKITT PAKISTAN OFFICE TO DISCUSS PUBLIC HEALTH PRIORITIES AND SOCIAL IMPACT
Pakistan

British High Commissioner Jane Marriott Visits Reckitt Pakistan Office To Discuss Public Health Priorities And Social Impact

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Karachi, Pakistan – British High Commissioner Jane Marriott visited Reckitt Pakistan’s Head Office in Karachi, where she engaged with the company’s leadership team and employees on Pakistan’s evolving public health landscape, the importance of health and hygiene access, and the role businesses can play in creating sustainable impact. The visit highlighted Reckitt’s more than 70-year legacy in Pakistan and its continued commitment to improving health and hygiene outcomes through trusted brands, strategic partnerships and purpose-led initiatives that reach communities across the country. Discussions focused on some of Pakistan’s most pressing public health challenges and the opportunities to improve health outcomes through greater awareness, access and innovation. Reckitt also shared its growing social impact agenda, which aims to expand access to health and hygiene solutions and drive meaningful impact at scale. A key area of discussion was the importance of trusted health and hygiene solutions in supporting everyday well-being. For generations, products such as Dettol Antiseptic Liquid have been a trusted part of Pakistani households, reflecting the important role quality and accessible hygiene solutions continue to play in helping families protect themselves and maintain healthier lives. Speaking on the occasion, Asif Hashmi, General Manager, Reckitt Pakistan, said:“For over 70 years, Reckitt has been part of the fabric of everyday life in Pakistan. Guided by our ambition to put Better Health in More Hands, Every Day, we continue to improve lives through trusted brands, purpose-led initiatives and partnerships that create meaningful impact across communities” Commenting on the visit, Jane Marriott, British High Commissioner to Pakistan, said:“What Reckitt Pakistan is doing through its school hygiene programme shows how practical action can deliver real results for children and communities. Better health and hygiene mean more children in classrooms, stronger futures and greater opportunity. Partnerships like this matter because they turn commitment into impact where it is needed most” The visit reinforced the importance of collaboration, long-term commitment and shared ambition in advancing healthier communities and addressing Pakistan’s evolving public health needs.

KSE-100 Index Closes Higher as Banking Stocks Shield PSX from Middle East Shock
Pakistan

KSE-100 Index Closes Higher as Banking Stocks Shield PSX from Middle East Shock

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The KSE-100 Index once again demonstrated resilience as Pakistan’s stock market weathered a storm of geopolitical uncertainty and sector-specific selling pressure to close Thursday’s trading session in positive territory. At a time when investors worldwide are nervously monitoring escalating tensions in the Middle East, the Pakistan Stock Exchange managed to deliver a modest gain. Strong performances from banking and exploration companies prevented a broader selloff, highlighting where investor confidence currently lies. The benchmark KSE-100 Index settled at 169,703.60 points, gaining 276.16 points or 0.16 percent by the end of trading. KSE-100 Index Witnesses Wild Swings Before Positive Finish The seemingly calm closing figure masked a highly volatile trading session. The KSE-100 Index moved within a massive range of 1,455 points during the day. It climbed to an intraday high of 170,138.18 points before retreating sharply to a low of 168,682.25 points as traders reacted to both domestic economic developments and international headlines. Total KSE-100 Index volume reached 186.64 million shares. Market breadth remained weak despite the positive close. Out of the 100 companies included in the benchmark index, only 40 stocks advanced, while 58 declined and two remained unchanged. The figures suggest that investors remained selective rather than broadly optimistic. Banking Stocks Become the Market’s Lifeline Commercial banks emerged as the biggest saviors of the market. The banking sector contributed approximately 276 index points, effectively carrying the benchmark into positive territory. Investors appeared to favor financially strong institutions amid uncertainty, viewing them as defensive plays during volatile periods. Among the largest contributors to the KSE-100 Index were: MEBL, which added nearly 79 points to the benchmark. MARI contributed around 60 points as exploration stocks benefited from rising energy prices. ENGROH supported the index with almost 60 points. UBL added approximately 59 points. POL contributed close to 58 points. These heavyweight stocks helped neutralize widespread weakness elsewhere. Fertilizer and Power Sectors Dragged the Market Not all sectors enjoyed investor confidence. Fertilizer companies emerged as the biggest losers and collectively erased more than 112 points from the benchmark. Power generation stocks also remained under pressure as investors reduced exposure to sectors perceived to be vulnerable during uncertain economic conditions. Major drags on the index included: FFC, which shaved off more than 58 points. HUBC reduced the benchmark by over 33 points. PPL contributed a negative impact exceeding 32 points. EFERT erased approximately 25 points. FATIMA further pressured the market. The sharp divergence between sectors reflects a market struggling to balance optimism with caution. Middle East Tensions Keep Investors on Edge Global events heavily influenced local trading sentiment. International oil prices moved higher after reports that the United States launched another round of military strikes against Iran. The developments revived fears of prolonged instability in the Middle East and raised concerns over potential disruptions to global energy supplies. The immediate beneficiary of higher oil prices was Pakistan’s exploration sector. Investors rushed toward energy-related names expecting improved profitability. However, the same geopolitical risks limited broader risk appetite across the market, preventing stronger gains. The result was a classic tug-of-war between opportunity and fear. Pakistan Economic Survey Offers a Confidence Boost While external developments unsettled investors, domestic economic indicators offered reasons for optimism. The Pakistan Economic Survey FY2025-26 indicated that the country’s economic recovery remained intact despite a challenging global environment. According to the survey, Pakistan’s economy expanded by 3.70 percent during the fiscal year compared with growth of 3.18 percent in the previous year. The stronger GDP performance reinforced hopes that economic stabilization efforts are beginning to produce tangible results. For many investors, this data provided reassurance that Pakistan’s broader economic outlook remains on a recovery path. Volume Leaders Signal Continued Speculative Interest Activity remained concentrated in a handful of stocks. FNEL dominated trading volumes with more than 118 million shares exchanged. SPSL followed with nearly 54 million shares and emerged among the strongest performers with a gain of over 10 percent. MLCF, LOADS, TPLRF1, TPL, KOSM, TPLP, WTL and PREMA also attracted significant investor attention. The heavy turnover suggests that speculative participation remains alive despite elevated uncertainty. Can the KSE-100 Index Maintain Its Momentum? Despite Thursday’s modest gain, the broader picture remains impressive. The KSE-100 Index has surged by 44,076 points, representing an extraordinary gain of 35.08 percent during the fiscal year. However, the benchmark remains down by 4,351 points or 2.50 percent on a calendar-year basis, underscoring the uneven nature of the market’s recovery. The latest session revealed a market caught between encouraging domestic fundamentals and mounting geopolitical risks. As long as this battle continues, volatility is likely to remain the defining feature of Pakistan’s equity market. For now, banking giants and exploration stocks are carrying the torch, but investors will be watching closely to see whether broader sectors eventually join the rally or whether external shocks once again test the resilience of the KSE-100 Index.

Pakistan Buffalo Genetic Material Exports to China Set to Unlock a Multi-Million Dollar Livestock Opportunity
Pakistan

Pakistan Buffalo Genetic Material Exports to China Set to Unlock a Multi-Million Dollar Livestock Opportunity

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Pakistan buffalo genetic material exports have entered a new era after Islamabad and Beijing signed a landmark agreement that could redefine the future of the country’s livestock industry. Long overshadowed by traditional export sectors, Pakistan’s prized buffalo genetics are now being positioned as a high-value commodity capable of generating millions of dollars in foreign exchange. The development is not merely another bilateral agreement. It signals Pakistan’s entry into the rapidly expanding global market for advanced animal genetics. Pakistan Buffalo Genetic Material Exports Open a New Revenue Stream Pakistan and China have signed a historic Material Transfer Agreement (MTA) that paves the way for the export of buffalo embryos, semen and sexed semen to the Chinese market. Under the agreement, China’s Royal Group has established a modern embryo, semen and ova production facility in Pakistan. The facility will collect, process and prepare buffalo genetic material for exports, creating a specialized value chain that did not previously exist at this scale within the country. Initial imports under the arrangement are estimated at around $5 million. However, the bigger story lies in future projections. Officials expect annual exports to reach approximately $25 million, creating a steady stream of foreign exchange earnings for Pakistan. For a country struggling with recurring balance-of-payment pressures, even niche export sectors are gaining strategic importance. Why Pakistan’s Buffalo Genetics Are Suddenly in Global Demand At the center of this opportunity is Pakistan’s renowned Nili-Ravi buffalo breed. Known internationally for its exceptional milk production and superior genetic traits, the breed has long been regarded as one of Pakistan’s most valuable yet underutilized biological assets. For decades, Pakistan exported dairy products and livestock on a limited scale while overlooking the commercial potential of its genetic resources. The China agreement changes that equation. Instead of exporting only conventional agricultural products, Pakistan is moving up the value chain by exporting intellectual biological assets that command significantly higher returns. The strategy could eventually establish Pakistani buffalo genetics as a globally recognized brand. The Hidden Battle to Protect Pakistan’s Genetic Wealth The agreement also addresses a concern that experts have repeatedly raised: protecting national genetic resources from exploitation. The Material Transfer Agreement functions as a legal safeguard mechanism. It ensures controlled access to buffalo genetics, regulates transfers and prevents unauthorized use or commercial misuse by external parties. Importantly, the framework protects Pakistan’s intellectual property rights linked to its buffalo genetic resources. This aspect of the agreement may prove just as significant as the expected export revenues. Without proper protections, countries risk losing ownership and control over valuable indigenous genetic assets that can later generate enormous profits elsewhere. Diplomatic Efforts Behind the Breakthrough The agreement was finalized through sustained diplomatic, technical and regulatory engagement led by Federal Minister for National Food Security and Research Rana Tanveer Hussain and Animal Husbandry Commissioner Dr. Syed Murtaza Hassan Andrabi. Their efforts involved close coordination with Chinese authorities to establish protocols acceptable to both countries. The successful conclusion of the negotiations highlights how agricultural diplomacy is increasingly becoming an economic tool rather than merely a technical exercise. Pakistan Buffalo Genetic Material Exports Could Redefine Livestock Economics Pakistan’s livestock sector contributes significantly to the agricultural economy and supports millions of rural households. Yet much of its potential remains untapped. The China agreement introduces a new business model where scientific innovation, biotechnology and genetics become drivers of export growth. If managed effectively, the initiative could encourage investment in breeding programs, veterinary services, research institutions and modern livestock infrastructure. It may also inspire policymakers to identify other indigenous assets with export potential beyond traditional commodities. For now, the message is clear. Pakistan is no longer selling only livestock products. It is beginning to commercialize knowledge, genetics and innovation. That transition could transform the country’s buffalo industry from a domestic agricultural success story into a globally competitive export enterprise. Pakistan buffalo genetic material exports represent more than a trade deal with China. They reflect a strategic shift toward higher-value exports built on indigenous strengths. The projected revenues may appear modest compared with major industries, but the long-term implications are substantial. If protected, promoted and expanded, Pakistan’s buffalo genetics could emerge as one of the country’s most surprising export success stories in the years ahead.

Karandaaz Pakistan and United Nations hosted Better Than Cash Alliance Launch Working Group to Accelerate Digital Merchant Payments in Pakistan
Pakistan

Karandaaz Pakistan and United Nations hosted Better Than Cash Alliance Launch Working Group to Accelerate Digital Merchant Payments in Pakistan

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Karachi – June 10, 2026: Karandaaz Pakistan and the Better Than Cash Alliance, hosted by the United Nations Development Programme (UNDP) are formally collaborating to accelerate digital merchant payments in Pakistan. The National Merchant Payments Working Group is being established to anchor this partnership, a multi-stakeholder platform designed to drive the growth of digital payments acceptance, particularly through the country’s inclusive instant payment system, Raast. While Pakistan has registered significant advancements in its digital financial infrastructure, including the rollout of Raast P2M, merchant adoption remains uneven. This initiative specifically aims to bridge that gap by reducing onboarding friction, addressing operational bottlenecks, and advancing financial inclusion for women and small merchants. Formed under the stewardship of the State Bank of Pakistan, the National Merchant Payments Working Group will serve as a neutral industry coordination platform for advancing merchant digitization in Pakistan. Drawing on successful models implemented across leading regional markets, the Working Group brings together banks, fintechs, payment service providers, merchant acquirers, merchant associations, and other key ecosystem stakeholders. The Working Group will facilitate industry-wide dialogue to identify market barriers, co-create practical solutions, and generate actionable recommendations to support policy and ecosystem development. It will also design and execute time-bound proofs of concept to advance merchant acceptance across Pakistan. By facilitating closer collaboration between industtry participants and policymakers, the Working Group aims to deliver a better-than-cash digital payments experience that unlocks new economic opportunities for businesses and consumers. “To achieve a truly cashless Pakistan, we must move beyond person-to-person transfers and digitize everyday business transactions. This collaboration with the Better Than Cash Alliance will build a collective forum, bringing together key industry stakeholders, ecosystem players, and financial institutions, where small businesses can transition away from cash, unlocking new economic opportunities. A cashless economy is the future, it is now time for us to embrace it” — Waqas ul Hasan, CEO, Karandaaz Pakistan The Better Than Cash Alliance brings extensive global expertise to this partnership with insights from in-country advisory services and implementation across Asia, Africa, and Latin America, as well as global advocacy leadership for financial inclusion within the G7 and G20. Karandaaz will complement this by bringing its deep domestic network spanning banks, fintechs, and regulators, as well as its extensive research and programmatic experience in small business digitization. “Responsible digital payments are a proven catalyst for enabling transparency, efficiency, and scaling financial inclusion. Pakistan’s digital merchant payments ecosystem holds enormous, untapped potential, yet adoption at scale remains constrained by questions of affordability, sustainability, and the commercial viability of digital payments for value-chain suppliers and merchants across the economy. Closing this gap requires the entire ecosystem to move together: suppliers, merchants, and financial service providers aligned around shared incentives and practical solutions. The National Merchant Payments Working Group is the best space and platform for the ecosystem to collectively resolve what no single player can address alone.” — Nshuti Mbabazi, Managing Director, Better Than Cash Alliance The Working Group will prioritize building consensus around sustainable merchant payment models, enabling structured knowledge exchanges between local and international experts, and consolidating industry perspectives to assist regulatory authorities in shaping future policies.

RCCI Budget Proposals Call for Lower Interest Rates and Energy Costs
Pakistan

RCCI Budget Proposals Call for Lower Interest Rates and Energy Costs

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The Rawalpindi Chamber of Commerce and Industry (RCCI) has urged the government to bring interest rates below 10 percent and reduce electricity and gas prices in the upcoming budget to stimulate investment and industrial growth. RCCI President Usman Shaukat said Pakistan should aim to align borrowing costs with those prevailing in other countries in the region. Lower Interest Rates Needed for Investment Usman Shaukat said high interest rates discourage investment and slow industrial activity. He stressed that the benchmark interest rate should be brought below 10 percent to encourage businesses to expand and attract new investments. According to him, lower borrowing costs would help industries grow and support economic activity. Falling Oil Prices Offer Opportunity The RCCI president said declining global oil prices provide the government with an opportunity to address inflation. He said lower international oil prices could ease economic pressures and help stabilize prices in the domestic market. According to him, the government should take advantage of the changing global environment to provide relief to businesses and consumers. Chamber Seeks Lower Electricity and Gas Tariffs Usman Shaukat highlighted the high cost of energy in Pakistan. He called for reductions in electricity and gas tariffs, saying expensive utilities are increasing production costs and hurting industrial competitiveness. He added that affordable energy is essential for sustainable economic growth and export expansion. Tax Base Should Be Expanded The RCCI president urged the Federal Board of Revenue (FBR) to broaden the tax base instead of increasing pressure on existing taxpayers. He also recommended reducing corporate tax rates to make Pakistan a more attractive destination for investment. According to him, a competitive tax regime would help strengthen the economy and encourage business activity. Support Sought for Electric Vehicles Usman Shaukat endorsed the government’s policy to promote electric vehicles (EVs), saying the shift helps save fuel and reduce dependence on imported energy. However, he noted that the International Monetary Fund (IMF) is pressing for higher taxes on electric vehicles. He proposed a differentiated policy under which smaller EVs would continue to enjoy lower taxes. At the same time, he said imposing taxes on electric vehicles equivalent to 1,500cc conventional vehicles would not be problematic. He also called for the continuation of tax incentives for locally manufactured electric vehicles to support the domestic industry. Pharmaceutical Exports Offer Growth Potential The RCCI president said Pakistan has significant opportunities to increase pharmaceutical exports. He urged the government to issue the notification for the Pharma Export Council without delay. He also recommended providing tax incentives to pharmaceutical exporters to help the sector expand in international markets. According to him, supportive policies could transform pharmaceuticals into an important source of export earnings. Focus on Growth and Competitiveness RCCI said lower interest rates, reduced energy costs, tax reforms, and export incentives are essential for improving Pakistan’s economic competitiveness. The chamber emphasized that measures supporting investment and industrial activity would help strengthen economic growth and create new opportunities for businesses.

ABAD Urges Tax Reforms in Budget 2026-27 to Revive Real Estate Investment
Pakistan

ABAD Urges Tax Reforms in Budget 2026-27 to Revive Real Estate Investment

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Chairman Hassan Bakhshi Presents Key Proposals to Simplify Property Taxation Association of Builders and Developers (ABAD) Chairman Muhammad Hassan Bakhshi has presented a set of budget proposals to the government. He says long-term policy is critical for the real estate sector and must be developed through consultation with all stakeholders, including builders, developers, buyers, and allied industries. Replace Section 7F With Area-Based Taxation The government introduced a new tax under Section 7F last year. Under this regime, builders pay 10% on net income, while developers face 12.5% and 15% respectively on all receipts. ABAD wants this replaced with the previous Section 100D, which taxed builders on a per-square-foot basis. Bakhshi argues that area-based taxation gives builders a clear, advance estimate of their tax liability regardless of project size. He says this will also close loopholes for corruption. Remove Section 236C Tax on Business Income ABAD is challenging the application of Section 236C, which is a Capital Gains Tax, on builders and developers. The council argues that property sales by builders constitute business income, not capital gains. Therefore, Section 236C should not apply to them. Similarly, sub-leasing of property should also be exempt from this tax. Reduce Section 236K Advance Tax to 0.25% Section 236K is an advance tax of 1.5% paid at the time of property purchase. Its purpose is to inform the government that a transaction has taken place. ABAD proposes reducing this rate to 0.25%. Bakhshi points out that no value appreciation occurs at the time of purchase. A lower rate will still keep the government informed about property transactions without burdening buyers. Restore Capital Gains Tax Exemption After Five Years Previously, Capital Gains Tax (CGT) expired after five to ten years of property ownership. This encouraged people to hold onto properties. The government has since removed this exemption entirely. Now, even a property sold after 50 years attracts CGT. ABAD wants the old law restored so that CGT is waived after five years of ownership. Cap Rental Income Tax at 15% ABAD wants more people to buy and rent out properties. However, excessive taxes on rental income are discouraging this. Bakhshi notes that landlords currently create two separate agreements, one showing the actual rent and another showing a lower figure to reduce tax liability. He proposes that the government fix rental income tax at a flat 15%. This will bring more landlords into compliance and increase government tax revenue. Broaden Tax Net Instead of Raising Tax Rates ABAD warns that the overall tax burden on businesses is already too high. Tax rates have reached nearly 50%, and any further increase in the next budget will force businesses to shut down and drive away investment. Bakhshi says the business community, chambers of commerce, trade associations, and even the IMF are all demanding the same thing: tax those who are not paying taxes rather than increasing the burden on existing taxpayers. He urges the government to reduce the load on compliant taxpayers and expand the tax net in Budget 2026-27.

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