Pakistan

Pakistan investment to GDP ratio remained stagnant during the current fiscal year as the government failed to achieve another key economic target despite efforts to attract foreign investment and improve economic stability. Official provisional figures showed that investment stayed at 14.4 percent of the national economy while savings declined further to 14 percent. According to data prepared by the planning ministry based on National Accounts results, the investment to GDP ratio remained unchanged from last year. However, it still fell short of the official target of 14.7 percent. The figures highlighted the government’s continued struggle to boost investment activity at a time when economic growth and job creation remain weak. The savings to GDP ratio also missed the official target of 14.3 percent. Savings dropped to 14 percent because of an expected current account deficit during the fiscal year. The ratio also remained lower than last year by 0.9 percent of GDP. Economic experts believe that weak investment levels continue to slow infrastructure development and social sector progress. The government is increasingly relying on borrowing to meet its financing needs because exports also declined by more than 6 percent during the first ten months of the fiscal year. Officials have started internal discussions about whether the second phase of trade liberalisation should be implemented from July. Policymakers fear that the first phase increased imports rapidly without helping exports grow. The government had launched the Sovereign Wealth Fund three years ago to attract foreign investment into Pakistan. However, the initiative remained inactive this year after the International Monetary Fund raised objections over its legal framework. The government has now tabled an amendment bill in the National Assembly to address IMF concerns. The Senate Standing Committee on Finance delayed voting on the bill and postponed the matter until its next meeting. The Special Investment Facilitation Council also failed to attract major foreign investment during the fiscal year. However, the council continued addressing procedural issues faced by local investors and businesses. The fixed investment to GDP ratio remained at 12.7 percent, missing the official target of 13 percent. Private sector investment slightly increased to 9.6 percent of GDP but stayed below the target of 9.8 percent. These figures are expected to be officially released in the upcoming Economic Survey of Pakistan. Public sector investment also weakened. The public investment to GDP ratio declined to 3.1 percent after the federal government reduced its development budget by nearly Rs200 billion. For the next fiscal year, the government has proposed a development budget of Rs1.126 trillion. However, actual spending will depend on whether revenue targets are achieved. Economists warn that failure to increase investment limits the government’s ability to improve roads, energy infrastructure, education, and healthcare using domestic resources. This situation increases dependence on domestic and foreign loans for development projects. Finance Minister Muhammad Aurangzeb is currently visiting China to secure a 250 million dollar loan by accessing Chinese debt markets. The government is seeking support through guarantees from the Asian Infrastructure Investment Bank and the Asian Development Bank. Pakistan’s current credit rating remains too weak to independently raise debt from Chinese markets. The government also failed to achieve its broader economic growth target during the fiscal year. Pakistan’s economy expanded by only 3.7 percent, which economists say is insufficient to generate employment opportunities for the growing youth population. A recent report warned that Pakistan’s population may rise by 62 percent to 389 million people by 2050. The report estimated that nearly 255 million people would fall within the working age category. Analysts say this population trend increases pressure on the government to accelerate investment and economic reforms. Despite the overall weak performance, some sectors recorded investment growth. Private investment in agriculture rose by 8.7 percent due to increased imports of machinery and livestock. Small scale investment, including slaughtering activities, increased by 25 percent. Investment in electricity, gas, and water supply increased by 7.6 percent. Surprisingly, the construction sector recorded growth of more than 60 percent despite a broader slowdown in the industry. Hotels and restaurants saw investment growth of 12.8 percent, while transportation and storage increased by 6.2 percent. The information and communication sector showed the highest growth with investment jumping by 110 percent during the fiscal year. Public sector investment also improved in selected industries. Manufacturing investment increased by 97 percent because of projects linked to the National Radio Telecommunication Corporation. Mining investment rose by 25.9 percent because of spending by Oil and Gas Development Company Limited. Investment in electricity, gas, and water supply grew by 5.1 percent due to projects undertaken by WAPDA. Public investment in transport and storage rose by 51.2 percent because of spending by the Civil Aviation Authority and the Pakistan National Shipping Corporation. In the construction sector, public investment increased by 7.4 percent due to development work by the Lahore Development Authority, the Gwadar Development Authority, and the Federal Government Employees Housing Authority. Public investment in communication increased by 31 percent because of purchases by Ufone and preparations linked to the 5G spectrum auction.

Pakistan’s National Assembly on Wednesday approved several important economic and financial reform bills aimed at improving fiscal discipline, strengthening debt management, promoting exports, and modernising the country’s financial system. The lower house of parliament passed the Fiscal Responsibility and Debt Limitation (Amendment) Bill, 2026, the Export-Import Bank of Pakistan (Amendment) Bill, 2026, the Special Economic Zones (Amendment) Bill, 2026, and the Netting of Financial Arrangements Bill, 2026. The bills received majority support during the National Assembly session. State Minister for Finance Bilal Azhar Kiani presented the four economic bills before the House. Meanwhile, Federal Minister for National Health Services Syed Mustafa Kamal tabled the Pakistan Nursing and Midwifery Council Bill, 2026, while Federal Minister for Housing and Works Riaz Hussain Pirzada introduced the Islamabad Capital Territory Condominium (Ownership and Management) Bill, 2026. The House also introduced the Pakistan Air Safety Investigation Amendment Bill 2026 and the Customs Amendment Bill 2026 for further consideration. Fiscal Responsibility Bill Focuses on Debt Management The Fiscal Responsibility and Debt Limitation (Amendment) Bill, 2026 seeks to strengthen Pakistan’s debt management framework and improve fiscal oversight. According to the statement of objects and reasons attached to the bill, the existing Fiscal Responsibility and Debt Limitation Act, 2005 already provides a framework for reducing the federal fiscal deficit and maintaining public debt at a prudent level in relation to the country’s Gross Domestic Product (GDP). The amendment aims to further strengthen the Debt Management Office (DMO), which plays a critical role in supporting the government’s debt management operations. Officials said the proposed changes will provide the DMO with additional resources and authority to improve planning, coordination, and execution of public debt management functions. Under Clause 2 of the amendment bill, the Director General and Directors of the DMO will be appointed on a contract basis for three years. Their contracts may be extended after performance evaluations. The appointments will depend on prescribed academic qualifications, professional expertise, and relevant experience. The government believes the move will improve institutional efficiency and create a more professional debt management structure. EXIM Bank Amendment Aims to Improve Governance Lawmakers also approved the Export-Import Bank of Pakistan (Amendment) Bill, 2026 to improve governance standards and operational efficiency at the state-owned financial institution. The amendment seeks to align the operations of the Export-Import Bank with the broader legal and regulatory framework governing state-owned enterprises in Pakistan. According to the official statement attached to the bill, the reforms are designed to ensure transparency, accountability, and sound corporate governance practices. The government said the changes will strengthen the bank’s compliance with the State-Owned Enterprises (SOE) Act while supporting broader national economic and trade objectives. Officials believe improved governance at the EXIM Bank could help facilitate exports, encourage investment, and support Pakistan’s external trade sector. Financial Sector Reforms Through Netting Law The National Assembly also passed the Netting of Financial Arrangements Bill, 2026, which seeks to reduce risks in Pakistan’s growing financial markets. The government stated that Pakistan’s financial sector has evolved significantly over the years with the introduction of new financial products and increased exposure among banks and financial institutions. The bill aims to provide legal clarity for netting arrangements used by banks and financial counterparties to reduce credit and settlement risks. Netting arrangements allow financial institutions to offset mutual obligations and exposures under financial contracts. These mechanisms help institutions optimise regulatory capital and improve financial stability. The statement of objects and reasons noted that such arrangements are already commonly used globally through privately negotiated agreements and international standards like International Swaps and Derivatives Association (ISDA) Master Agreements. However, uncertainty regarding the enforceability of these arrangements during bankruptcy, insolvency, or termination events has limited the growth of Pakistan’s domestic financial markets. The new legislation aims to remove those legal ambiguities and encourage both local and international financial counterparties to engage more confidently in Pakistan’s financial sector. Government Pushes Broader Economic Reforms The passage of these bills reflects the government’s broader efforts to strengthen economic governance and modernise Pakistan’s fiscal and financial systems amid ongoing economic challenges. Analysts say the reforms could improve investor confidence, enhance institutional transparency, and support long-term financial stability if implemented effectively. The government has increasingly focused on fiscal reforms, debt sustainability, export promotion, and regulatory improvements as part of its wider economic agenda.

Federal Minister for Planning Development and Special Initiatives Ahsan Iqbal said Pakistan CPI inflation during July to February of fiscal year 2025 26 stood at 5.5 percent compared to 5.7 percent during the same period last year. However he warned that monthly inflation recorded an upward trend in recent months. While briefing the media during the Monthly Development Update for May 2026 Ahsan Iqbal said Pakistan CPI inflation increased from 7.3 percent in March 2026 to 10.9 percent in April 2026. The rise pushed inflation back into double digits after months of relative stability. The minister said Pakistan’s economy showed encouraging signs during the first eight months of FY 2025 26 despite global economic uncertainty and regional tensions. He highlighted lower average inflation recovery in industrial production exchange rate stability strong stock market performance improved Public Sector Development Programme (PSDP) utilization and higher remittances. Government Strengthens Price Monitoring Measures Ahsan Iqbal said the government increased price monitoring efforts to control inflation and protect consumers from rising costs. He stated that the National Price Monitoring Committee now holds weekly meetings to review market trends and commodity prices. According to the minister coordinated efforts between federal and provincial governments helped bring prices of essential commodities closer to pre conflict levels. Authorities remain focused on maintaining supply chains and reducing pressure on household budgets. The minister also referred to projections by the International Monetary Fund (IMF). He said the IMF expects global economic growth to slow to 3.1 percent in 2026 compared to the earlier estimate of 3.3 percent before regional conflicts intensified. He added that global inflation is projected to rise to 4.4 percent from the previous estimate of 3.8 percent. According to him international economic uncertainty continues to affect developing economies including Pakistan. Large Scale Manufacturing Records Recovery The minister said Pakistan’s Large Scale Manufacturing (LSM) sector recorded a broad based recovery during the current fiscal year. He stated that LSM growth reached 6.5 percent during July to March FY 2025 26 after the sector experienced difficulties over the past two years. Ahsan Iqbal attributed the recovery to several government measures including the Prime Minister’s export enhancement package increased private sector credit improved PSDP utilization and ease of doing business reforms under the URAAN Pakistan initiative. He said 15 out of 22 industrial sectors showed positive growth during the period. These sectors included automobiles electrical equipment tobacco food beverages wearing apparel and non metallic mineral products. Economic analysts believe industrial recovery could support employment growth and improve investor confidence if the momentum continues over the coming months. FBR Revenues and Remittances Show Improvement The minister said fiscal performance remained strong despite economic challenges. He stated that the Federal Board of Revenue (FBR) collected Rs 10.3 trillion during July to April FY 2025 26. The figure represents a 10.3 percent increase compared to the same period last year. According to Ahsan Iqbal improved tax enforcement and gradual economic recovery supported higher revenue collection. He also highlighted strong remittance inflows from overseas Pakistanis. Remittances increased by 8.5 percent to 33.9 billion US dollars during the period under review. The minister said the increase reflects the confidence of overseas Pakistanis in the country’s economic stability. However he warned that ongoing tensions in the Middle East could create risks for future remittance inflows. He said the government is taking proactive measures to protect Pakistani workers abroad and ensure continued support for overseas employment opportunities. Current Account Remains in Surplus Discussing the external sector Ahsan Iqbal said exports of goods and services reached 30.6 billion US dollars during July to March FY 2025 26. Imports during the same period increased to 56.3 billion US dollars. The minister noted that services exports recorded strong growth of 17 percent and reached 7.3 billion US dollars. The increase outpaced the 10.1 percent growth in services imports. Despite external pressures Pakistan maintained a current account surplus for three consecutive months. According to the minister strong remittances and rising information technology exports helped support the external account. Economic experts say the continuation of export growth and remittance inflows will remain critical for maintaining exchange rate stability and reducing pressure on foreign reserves.

Karachi, May 13, 2026: Engro Vopak Terminal Limited (EVTL) and Engro Elengy Terminal Limited (EETL) hosted an industry-wide event in Karachi, bringing together key stakeholders from Pakistan’s terminals and maritime ecosystem to recognize the role of critical terminal infrastructure in supporting national economic progress, energy security and everyday life across the country. The event was attended by Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry and Chairman Port Qasim Authority (PQA), Rear Admiral (R) Syed Moazzam Ilyas, along with other stakeholders and colleagues from across Engro. Speaking at the event, the Federal Minister for Maritime Affairs said, “Pakistan’s maritime progress is built on a strong partnership between the Ministry of Maritime Affairs, PQA, and Engro working as one ecosystem. The talent and capability within our country is immense – and evident in the seamless operations we see every day. Scaling such investments is vital for long-term national growth, instead of diverting capital into external markets. Pakistan is our home, and it continues to offer real opportunity.” Pakistan’s economy remains deeply dependent on maritime trade, with nearly 90% of the country’s trade moving through sea routes. Against this backdrop, efficient and safe terminal operations play a central role in ensuring uninterrupted movement of energy, LNG, LPG, chemicals and industrial inputs that keep industries running, businesses open and households supplied. Through conducive policies and a progressive approach, the Ministry of Maritime Affairs continues to enable foreign investment and support future growth in the sector. At the same time, PQA has remained a reliable partner in ensuring Pakistan’s energy and trade hub operates with safety and operational excellence. With the continued guidance and support of both authorities, Engro’s terminal businesses have focused on strengthening infrastructure capability and operational efficiency.Syed Ammar Shah, CEO of Engro’s terminals, said, “We see ourselves as enablers of national progress – with every vessel handled, every cargo delivered, and every safe operation completed, we support businesses, keep industries running, and make everyday life possible across Pakistan.” EETL contributes approximately 15% of Pakistan’s daily gas requirements and has enabled around USD 5 billion in savings through more efficient power generation. EVTL, meanwhile, serves almost 50% of imported gas demand, helping ensure that energy continues to move from port to pipeline to people. Beyond energy, EVTL handles chemicals that serve as building blocks for key sectors of Pakistan’s economy, including textiles, construction, infrastructure development and agriculture. The company’s teams safely handle flammable, toxic, cryogenic and corrosive products every day, forming a critical link in Pakistan’s industrial supply chain while contributing annual savings of up to USD 500 million for the country. The event underscored that Engro’s terminals are not only strategic infrastructure assets, but also key enablers of industrial productivity, energy reliability and economic continuity. From supporting power generation and industrial production to enabling household energy supply and agricultural inputs, Engro’s terminal operations remain closely linked with everyday life across Pakistan.

KARACHI : Pakistan has emerged among the top 10 exporters of truck and bus radial (TBR) tyres to key global markets including the United States and Brazil, marking a significant shift in the country’s industrial and export landscape. Industry data indicates that Pakistani tyre exports have gained traction in recent years, with the United States and Brazil now among the largest destinations. At the centre of this momentum is Service Long March Tyres Limited (SLM), the country’s largest tyre manufacturer and exporter, which has rapidly expanded its international footprint since commencing operations in 2022. The company has recorded strong export growth across the United States, Brazil, as well as emerging markets such as South Africa and Egypt. The export push has been supported by compliance with stringent international standards, including certifications required for entry into regulated markets such as the US and Brazil, where quality and performance benchmarks remain critical for market access. Service Long March Tyres (SLM) is leveraging state-of-the-art Chinese technology to maintain one of the lowest production cost structures among tyre manufacturers in Pakistan, providing the company a strong competitive advantage in international markets and enabling it to export nearly 40% of its truck and bus radial (TBR) tyre production. Domestically, Pakistan’s tyre market continues to present significant scale. Annual demand is estimated at around 1.7 million units in the truck and bus segment, alongside approximately 7 million units for passenger vehicles. Historically, a large portion of this demand was met through imports, but local manufacturing is increasingly replacing imported volumes. SLM currently produces approximately 1.6 million TBR tyres annually and plans to expand capacity to 2 million units by July 2026 and 2.2 million units by June 2027. The company holds an estimated 58% share in the domestic TBR segment, positioning it as a key player in Pakistan’s import substitution efforts and foreign exchange savings. The company’s manufacturing facility in the Nooriabad Special Economic Zone provides logistical and cost advantages, supporting both domestic distribution and export competitiveness. Industry analysts note that the combination of rising exports, capacity expansion, and import substitution is gradually repositioning Pakistan’s tyre sector as a potential contributor to foreign exchange earnings. With further planned expansion into passenger car tyre manufacturing, alongside continued growth in commercial tyre output, Pakistan’s tyre industry is expected to strengthen its presence in global markets, reflecting a broader shift toward export-led industrial growth.

Karachi: Standard Chartered Bank hosted a focused client event in Karachi for members of the North Karachi Association of Trade and Industry (NKATI), a key trade body representing one of the city’s most important SME and industrial business communities. The event was held to strengthen engagement with NKATI members, support the onboarding of new SME clients, and further expand the Bank’s foreign exchange relationships with businesses seeking to grow their cross-border trade and treasury capabilities. The discussion highlighted how tailored banking and FX solutions can help businesses manage market volatility, improve transaction efficiency, and unlock new international opportunities. With its international network and deep foreign exchange expertise, Standard Chartered is well placed to support businesses looking to scale beyond domestic markets. Commenting on the event, Saadya Riaz, Head of Wealth and Retail Banking, said, “At Standard Chartered, we are committed to supporting Pakistan’s business ecosystem by building meaningful relationships with growth-oriented enterprises and industry bodies. This engagement with NKATI reflects our focus on helping SMEs access the banking capabilities, foreign exchange expertise, and international network they need to scale and succeed in an increasingly connected marketplace.” Key attendees from the organisation included NKATI President Faisal Moiz Khan and Ali Arsh Khan, Founder and Chairman of the International Business Forum (IBF). The event reflects Standard Chartered’s continued commitment to engaging with influential business networks and helping clients capture growth opportunities.