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PIA privatization enters first phase as consortium takes 66.67% stake
New majority shareholder injects fresh equity into PIACL, while PIA Holding Company retains a 33.33% stake
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Jul 03, 2026
Economy
Business
Remittances to top $41.5 billion in FY26, set to rise further in FY27
SBP Governor says overseas Pakistanis will face no new remittance charges as a new incentive scheme replaces Sohni Dharti Programme
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SBP expects Pakistan's GDP growth to exceed 3.7% this fiscal year
Monetary policy to be announced through four press conferences annually instead of two
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Pakistan posts record 43,559 new company registrations in FY26
Corporate registrations rise 24% to a record high, taking Pakistan's total registered companies past 300,000 as foreign investor participation strengthens
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Pakistan's new petroleum price stabilisation fund faces fiscal and IMF hurdles
Prime Institute says the proposed fund lacks sustainable funding, operating rules and financial backing
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Pakistan's June fuel sales tumble as furnace oil demand drops 68%
Overall petroleum sales fell 20% year-on-year to 1.26 million tons, despite a 7% monthly recovery in gasoline and diesel demand
Jul 02, 2026
Jul 02, 2026
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World Bank urges Pakistan to revamp NFC Award to strengthen economy
Pakistan needs to strengthen the way public resources are shared among the federal, provincial and local governments to safeguard macroeconomic stability, improve public services and meet the needs of its rapidly growing population, the World Bank said in a report released on Wednesday.
In its report, "Strengthening Fiscal Federalism in Pakistan," the World Bank said the 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award, introduced in 2010, marked a historic shift by devolving key service delivery responsibilities to the provinces and significantly increasing provincial revenues. However, structural weaknesses continue to undermine fiscal discipline, limit revenue mobilization and reduce the effectiveness of public spending.
Federal deficit driven by higher transfers, weak revenue collection
The report said the federal fiscal deficit widened largely because transfers to the provinces increased sharply after the 7th NFC Award without a corresponding reduction in federal spending, while revenue collection remained stagnant.
According to the World Bank, provincial revenues increased from less than 4% of gross domestic product (GDP) before the reforms to an average of 6.5% of GDP between 2010 and 2024. However, federal spending did not decline proportionately despite the transfer of responsibilities.
The report also said Pakistan's fragmented tax system, divided across five tax jurisdictions, has increased compliance costs and constrained revenue collection. It noted that agricultural income remains largely untaxed despite agriculture contributing more than one-fifth of the country's GDP.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said, "Pakistan took a historic step in 2010 by bringing government closer to its people, but the full promise of devolution has yet to be realized."
She said aligning financing with government responsibilities, broadening the tax base and ensuring resources reach schools, health facilities and local communities would be critical to maintaining economic stability and improving service delivery.
Spending fails to reflect development needs
The report said devolution has achieved only limited success in aligning public spending with citizens' needs.
It found that the formula for distributing resources among the provinces does not adequately reflect fiscal needs or encourage provinces to improve tax collection and public service delivery.
More than 80% of provincial expenditure in fiscal year 2023 was absorbed by recurrent costs, primarily administrative spending, leaving relatively limited resources for development sectors such as education and health.
The report also said spending across districts continues to follow historical patterns rather than poverty levels or service delivery gaps.
Meanwhile, the share of total government spending managed by local governments declined from about 10% in 2005 to less than 5% in 2024.
Tobias Haque, the World Bank's lead country economist and the report's lead author, said, "The structure of fiscal federalism shapes whether children attend functioning schools and whether health facilities are stocked with medicines."
He said the planned new NFC Award presents an opportunity to redesign incentives by rewarding provinces that improve revenue collection and service delivery while directing more resources to areas with the greatest needs.
Reform options for a new NFC Award
Rather than prescribing a single solution, the report outlines a range of policy options that could be implemented through a new NFC Award within Pakistan's existing constitutional framework.
The proposed reforms include:
- Aligning federal financing with constitutional responsibilities.
- Strengthening domestic revenue mobilization by broadening the tax base.
- Empowering local governments through more predictable fiscal transfers.
- Improving coordination among federal, provincial and local governments.
The World Bank also recommended reducing overlapping federal expenditures, assessing revenue potential at both the federal and provincial levels, and considering function-specific deductions from the divisible tax pool to fund national priorities, including debt servicing, infrastructure, social protection, security, environmental programs and intergovernmental coordination.
The report added that holding regular and timely NFC Awards would itself constitute a major reform by making fiscal arrangements more predictable and creating greater scope for consensus-building on future reforms.
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Jul 02, 2026
Jul 02, 2026
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Pakistan raises climate levy to PKR 5 per liter on petrol and diesel
The new rates take effect July 2, with the petroleum levy cut by PKR 2.50 per litre to offset the higher climate levy
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Business
Pakistan meets FY26 inflation target as annual average CPI hits 7.05%
June inflation stood at 11.07% as tomato, onion and potato prices surged
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Pakistan seeks spot LNG cargo for July delivery in second tender this week
State-run Pakistan LNG Ltd. invites global bids for one cargo as the country continues spot purchases amid supply uncertainty and lower LNG imports
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Pakistan's FBR beats revised FY26 tax target with record PKR 13 trillion collection
Tax authority exceeds June collection goal as income tax remains the biggest source of revenue
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Pakistan central bank orders banks to stop freezing accounts without legal approval
SBP directs lenders to verify legal authority before imposing account restrictions, following an Islamabad High Court order
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Pakistan's FY26 inflation seen near target despite sharp jump in June on low base effect
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Pakistan completes first financial closing of PIA privatization, transfers management to consortium
Arif Habib-led consortium injects PKR 80 billion into the national carrier, with further investment and a potential stake purchase planned over the next year
Jun 29, 2026
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Global farm incomes to rise 9% by 2035 despite growing risks
OECD-FAO report says productivity gains will support agriculture, but energy costs and geopolitical shocks threaten food security
Jun 29, 2026
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Weak infrastructure and low productivity weigh on Pakistan's export sector
Pakistan Business Council report highlights opportunities in higher-value exports, including chemicals, processed foods and fisheries
Jun 29, 2026
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Pakistan seeks to recover PKR 45.4B in unpaid taxes after audit finds widespread violations
More than 1,300 withholding agents failed to deduct taxes, prompting auditors to call for stronger enforcement and faster legal action
Jun 29, 2026
Jun 29, 2026
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Cash preference stays stubbornly high as Pakistan's currency in circulation hits record PKR11.93 trillion
Currency in circulation increased by more than PKR1 trillion in Q3 FY26 as mobile banking
Jun 29, 2026
Jun 29, 2026
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Pakistan raises PKR 1.65 trillion through T-bills and sukuk
The government raised more than PKR 1.65 trillion through treasury bill and sukuk auctions settled on June 24, while rejecting all bids for a 10-year floating-rate bond, highlighting strong investor demand for short-term and Shariah-compliant instruments amid a declining interest-rate environment.
According to auction results released by the State Bank of Pakistan (SBP), the government mobilized PKR 1.243 trillion through market treasury bills (MTBs), PKR 372.8 billion through Government of Pakistan Hybrid Sukuk (GHS), and accepted PKR 38.4 billion in Government of Pakistan Ijarah Sukuk (GIS) purchases on a deferred-payment basis. However, it raised no funds through the auction of 10-year Floating Rate Pakistan Investment Bonds (PFLs) after rejecting all bids.
Treasury bills raise PKR 1.243 trillion
The largest inflow came from the MTB auction, where total bids worth PKR 3.09 trillion were submitted across one-month, three-month, six-month and 12-month tenors.
The government accepted PKR 1.061 trillion through competitive bids and an additional PKR 182.16 billion through non-competitive bids, bringing total accepted bids to PKR 1.243 trillion.
The 12-month paper attracted the strongest demand, accounting for PKR 1.75 trillion in bids and PKR 603.6 billion in accepted competitive bids at a cut-off yield of 11.8381%.
The six-month tenor secured PKR 187.05 billion at a cut-off yield of 11.7479%, while the one-month and three-month papers raised PKR 148.7 billion and PKR 121.34 billion, respectively.
Provincial governments invested PKR 100 billion through non-competitive bids, all of it concentrated in the three-month tenor.
SBP rejects all 10-year floating-rate bond bids
In contrast, the government failed to raise any funds through the auction of 10-year Floating Rate Pakistan Investment Bonds.
Primary dealers submitted bids worth PKR 302.5 billion within a quoted price range of 94.0322 to 96.0004. However, the SBP rejected all competitive bids and accepted no non-competitive bids, leaving the total accepted amount at zero.
The decision suggests the government was unwilling to accept the pricing demanded by investors for longer-term floating-rate debt.
Hybrid sukuk exceed target
Separately, the government exceeded its combined PKR 350 billion target in the latest Hybrid Sukuk auction conducted through the Pakistan Stock Exchange auction platform.
Total accepted bids reached PKR 372.8 billion across fixed-rate and variable-rate instruments.
The one-year fixed-rate discounted Hybrid Sukuk attracted bids worth PKR 507.74 billion against a target of PKR 150 billion. The government accepted PKR 180.59 billion, including PKR 173.58 billion through competitive bids at a cut-off rental rate of 11.688% and PKR 7.01 billion through non-competitive bids.
Investor interest was even stronger in the 10-year variable rental-rate Hybrid Sukuk, where bids totaled PKR 956.5 billion against a target of PKR 200 billion.
The government accepted PKR 192.25 billion, including PKR 190.85 billion through competitive bids and PKR 1.4 billion through non-competitive bids.
Deferred-payment Ijarah Sukuk adds PKR 38.4 billion
In another Shariah-compliant financing transaction, the SBP conducted an auction for the outright purchase of Government of Pakistan Ijarah Sukuk on a deferred-payment, or Bai Muajjal, basis.
Total offers received amounted to PKR 270.05 billion, with the overwhelming majority concentrated in the 1,096-day tenor.
The government accepted PKR 38.4 billion in face-value terms, generating a deferred Bai Muajjal value of PKR 56.14 billion.
The longest tenor accounted for PKR 30.4 billion of accepted bids, while the 365-day and 183-day tenors contributed PKR 5 billion and PKR 3 billion, respectively.
The auction results indicate continued investor preference for short-term government securities and Shariah-compliant instruments, while demand for longer-term conventional debt remained constrained at the yields offered by the government.
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Jun 24, 2026
Jun 24, 2026
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Pakistan fuel price cut inflicts PKR 104 billion loss on oil industry
Oil marketers and refineries say revised pricing formula wiped out inventory value, strained liquidity and risks deterring foreign investment
Jun 24, 2026
Jun 24, 2026
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