The Economic Pulse

12/06/2026

12/06/2026

Pakistan Federal Budget FY27: Initial Impressions & Macroeconomic Targets
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​Key Macroeconomic Targets
​Real GDP Growth: Projected at 4.0% YoY for FY27 (compared to 3.7% in FY26). The overall economy size stands at US452bn, with per-capita income rising to US1,501.

​Inflation: Estimated at 8.2% YoY (down from 7.0% average in FY26).
​Budget Deficit: Targeted at 3.6% of GDP, with a primary surplus target of 2.0% of GDP.

​FBR Tax Collection: Targeted at PkR15.3tn (+17.6% YoY). Non-tax revenue is set at PkR5.336tn.

​Expenditure Breakdown
​Total Federal Expenditure: Budgeted at PkR18.8tn.
​Interest Payments: Stands at PkR8.054tn, accounting for roughly 43% of total outlays.

​Defense Affairs & Services: Allocated PkR3.0tn.
​Development & Net Lending (PSDP): Federal PSDP is set at PkR1.0tn (with provincial PSDP at PkR2.2tn).

​Social Safety Net (BISP): Allocation increased to PkR838bn (+17% YoY), expanding coverage to 12 million households.

​Key Tax & Policy Structural Changes
​1. Proposed Salary Slabs & Tax Rates
​The government has rationalized/lowered several middle-income salary slabs and introduced two new slabs:

​Up to PkR600,000: 0%
​PkR600,000 – PkR1,200,000: 1%
​PkR1,200,000 – PkR2,200,000: 11%
​PkR2,200,000 – PkR3,200,000: 20% (Reduced from 23%)
​PkR3,200,000 – PkR4,100,000: 25% (Reduced from 30%)
​PkR4,100,000 – PkR5,600,000: 29% (Reduced from 35%)
​PkR5,600,000 – PkR7,000,000: 32% (New Slab)
​Above PkR7,000,000: 35%

​Note: An income surcharge on income over PkR10mn is fully abolished (previously 9%).

​2. Super Tax on Corporates
​The super tax on corporate slabs up to PkR500mn has been completely abolished (0%) across 7 income brackets. The top slab (for income exceeding PkR500mn) has been reduced from 10% to 8%.
​Note: This reduction does not apply to Banks, E&Ps, and Fertilizer companies.

​3. Real Estate, Trade, & Consumer Taxes
​Property Transfers: Withholding Tax (WHT) on property transfers is nearly halved to 1.25% for purchasers and 2.75% for sellers to stimulate the construction sector.

​Cross-Border Transactions: WHT on cross-border credit/debit card transactions slashed from 5% to 0.5%. Capital Value Tax (CVT) on foreign assets is abolished.

​Exporters: The 0.25% advanced export surcharge is abolished, and minimum tax is reduced to 1.25%.

​Automobiles: Federal Excise Duty (FED) increased on vehicles above 2,000cc and electric vehicles priced above PkR20mn.

​Aviation: FED on business-class air travel has been abolished.

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12/06/2026

Just In | June 12, 2026, ​Reports from various news channels indicate that Iran and the United States are looking at a critical framework agreement. State media outlines that comprehensive negotiations addressing the future of Tehran's nuclear program are scheduled to launch within a designated 60-day window following the formal signing of a memorandum of understanding.

​The proposed text outlines a dual-phase approach intended to completely halt regional hostilities before shifting focus to the complex nuclear enrichment issues. Furthermore, the draft agreement proposes a strategic timeline for unfreezing billions in blocked assets while ensuring regional maritime transit pathways remain protected.

​While top officials have urged caution, noting that a definitive conclusion has not yet been fully finalized, the international community is watching closely. Financial markets have already responded sharply to the potential diplomatic resolution as both sides review the finalized terms.

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12/06/2026

JUST IN — June 12, 2026/ ​Energy markets are experiencing a massive shift today as global oil prices tumble over 3%. Both Brent and WTI crude are dropping fast, with Brent hitting 87.06 and WTI falling to 84.69 after unexpected developments directly halted threatened regional military actions.

​Investors are actively reacting to reports that a monumental US-Iran peace agreement could be signed as early as tomorrow. This potential diplomatic breakthrough has triggered a sharp reduction in risk premiums, causing Brent to shed 3.67% and WTI to drop 3.44%.

​The primary catalyst for this sudden price dip is the anticipated reopening of critical waterways. This successful resolution is expected to instantly clear shipping routes and secure vital crude supplies, reversing months of intense energy pressure on global markets.

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12/06/2026

Updates: June 12, 2026. A U.S. federal court has issued a temporary restraining order against former TRG chief executive Zia Chishti, legally blocking him from pursuing litigation linked to claims that were previously deemed settled. The ruling prevents him from initiating or continuing lawsuits globally.

​The District Court for the Southern District of New York reinforced that claims relating to conduct before January 2022 were permanently released. This cross-border decision directly impacts multiple ongoing legal proceedings, including a shareholder oppression petition pending locally before the Sindh High Court.

​This legal development follows a massive shakeup in the company’s shareholder landscape. Following a recent enforcement of pledged shares by JS Bank, Zia Chishti’s holding plummeted to just 1.2%, significantly altering control over the corporate entity while the management reviews its next strategic moves.

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12/06/2026

Market Alert: June 12, 2026/ Gold prices surged over 2.5% today as safe-haven demand reacted aggressively to emerging geopolitical shifts. This rapid movement reversed a multi-day downward trend, quickly pushing bullion back above the $4,200 mark.

​The primary catalyst driving this sudden rally is renewed optimism surrounding a potential peace accord between the United States and Iran. Speculation intensified after comments suggested a formal memorandum of understanding could be finalized over the weekend.

​However, the market remains highly volatile as conflicting statements emerge regarding the finality of the agreement. Investors are carefully watching how these diplomatic developments will influence oil supplies and upcoming global central bank interest rate decisions.

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12/06/2026

JUST IN — June 12, 2026, President Trump announced that a settlement has been reached to permanently end the war with Iran. He stated a formal agreement could be signed as soon as this weekend in Europe, with high-level diplomats representing the United States.

​According to the administration, the potential deal has received initial approval from top leadership on both sides. The proposed terms reportedly include a timeline for demining the strategic Strait of Hormuz to safely reopen international shipping lanes.

​However, official Iranian sources note that a final conclusion has not yet been formally verified. This development follows a period of heavy military escalation and intense, whiplash diplomatic negotiations between the nations.

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11/06/2026

A dramatic turn in Middle East diplomacy unfolds this week

​Just In – June 11, 2026/ Senior national security officials from the United Arab Emirates and Iran met face-to-face this week for the first time since the US-Israeli war against Tehran began in late February. According to Bloomberg News, this unexpected meeting signals a major shift in approach as both nations recognize the value of improved bilateral relations.

​Abu Dhabi’s recent outreach was primarily driven by a desire for reduced regional tensions. The Gulf state views Tehran's government as hostile but unlikely to be removed from power. De-escalating allows the UAE to safeguard its ambitious economic goals, which include investing billions of dollars into expanded oil production and high-tech artificial intelligence data centers.

​Iran also views rebuilding this relationship as a critical priority. Before the outbreak of the war, the UAE stood as one of the Islamic Republic’s largest trading partners and functioned as a primary channel for sanctioned Iranian oil. This diplomatic pivot underscores how economic survival and regional stability are forcing a reassessment of traditional rivalries.

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11/06/2026

Update / June 11, 2026/ ​Pakistan’s automotive sector recorded a notable 19.3% year-on-year growth in May 2026. According to PAMA, combined sales of passenger cars, jeeps, and light commercial vehicles reached 17,660 units.

​However, momentum cooled on a month-on-month basis, dropping 19.8% compared to April's high volume of 22,015 units. Despite this monthly decline, cumulative sales for the first 11 months of FY26 spiked by 45.5%.

​Industry experts attribute the long-term surge to stabilizing economic indicators. This recovery highlights renewed consumer interest and expanding production capabilities nationwide.

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