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In Focus
Pakistan backs Saudi Arabia’s right to self-defence, says Foreign Office
Islamabad working to revitalise US-Iran MoU; Riyadh’s multinational maritime defence coalition backed by Pakistan, 13 other countries
On 31 July, Dawn reported that Pakistan endorsed Saudi Arabia's air strikes in Iraq as an exercise of its right to self-defence under Article 51 of the UN Charter, while reaffirming that it would honour defence commitments with its Gulf partners. Foreign Office (FO) spokesperson Tahir Andrabi said attacks by non-state actors on Saudi Arabia were "utterly condemnable" and stressed that Pakistan would fulfil its obligations under defence agreements with Saudi Arabia, Kuwait and other Gulf states.
Andrabi said Pakistan's defence partnerships would not undermine its role as a mediator between Iran and the United States, insisting that security cooperation and diplomacy operate independently. He said Islamabad remained actively engaged with regional and international stakeholders and was working to bring Washington and Tehran back to negotiations under the Islamabad MoU, urging both sides to exercise restraint, de-escalate tensions in the Strait of Hormuz, and resume technical-level talks.
The remarks came as Saudi Arabia announced a multinational maritime defence coalition to protect shipping routes in the Red Sea and Bab al-Mandeb following escalating attacks on commercial vessels and energy infrastructure by Yemen’s Houthi rebels. Pakistan was among 14 countries backing the initiative. The latest developments also follow Pakistan's expanding defence ties with Gulf states, including the Strategic Mutual Defence Agreement with Saudi Arabia and the recently ratified Pakistan-Kuwait Defence Cooperation Agreement, while Islamabad continues to position itself as a diplomatic intermediary in the regional conflict. (“Pakistan backs Saudi right to self-defence after Iraq strikes,” Dawn, 31 July 2026; “Riyadh unveils maritime alliance as war spreads,” Dawn, 31 July 2026; “Pakistan says 'doing utmost' to bring US, Iran back to Islamabad MoU,” Dawn, 30 July 2026)
In Brief
EXTERNAL
Pakistan's removal from Lloyd's war-risk could affect economic growth positively, says Foreign Minister
On 01 August, The Express Tribune reported that Deputy Prime Minister and Foreign Minister Ishaq Dar welcomed the Lloyd's Market Association's Joint War Committee decision to remove Pakistan from its war-risk Listed Areas, saying it is expected to lower shipping and insurance costs and support economic growth, crediting the High Commission in London's efforts; Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry called it a milestone that would improve export competitiveness and boost international shipping confidence, noting a special committee had presented Pakistan's case to Lloyd's since March using technical evidence. Pakistan had been on the list for decades, with the listing requiring shipowners to pay additional war-risk premiums, and officials said the removal would also make Karachi Port, Port Qasim, and Gwadar more attractive to global shipping lines. ("Pakistan removal from Lloyd's war-risk list will bring economic growth: FM Dar," The Express Tribune, 1 August 2026)
PM Shehbaz welcomes latest developments under Gaza Peace Plan
On 31 July, Dawn reported that Prime Minister Shehbaz Sharif welcomed developments under the Board of Peace towards implementing the disarmament process under the Gaza Peace Plan, after US President Donald Trump announced talks in Cairo had led to a phased disarmament agreement for Hamas and other armed groups, though a Hamas official called it a draft and US officials said Israel was sceptical Hamas would surrender its weapons; Shehbaz commended the mediating countries, including the US, Egypt, Qatar and Turkiye, and Trump's "courageous leadership," and reiterated Pakistan's hope for a credible, time-bound process leading to an independent, sovereign Palestinian state on pre-1967 borders with Al-Quds Al-Sharif as its capital. Pakistan is a founding member of the Board of Peace, having signed its charter in January alongside 25 other countries. ("Pakistan welcomes Board of Peace developments under Gaza Peace Plan: PM Shehbaz," Dawn, 31 July 2026)
ECONOMY
Latest round of Middle East tensions could impact inflation, external sector negatively, says Finance Ministry
On 30 July, Dawn reported that the finance ministry, in its Monthly Economic Update & Outlook, warned that renewed geopolitical tensions in the Middle East pose downside risks to inflation and the external outlook, projecting CPI inflation of 9-10 per cent in July while assuring the external sector would remain resilient given fiscal discipline, structural reforms and stronger industrial activity; the ministry said macroeconomic stabilisation had largely been achieved in FY2026, with average inflation within target, IT exports reaching a record USD 4.6 billion, and the current account posting only a marginal USD 140 million deficit, developments that had prompted S&P Global to upgrade Pakistan's sovereign rating to B from B-. It targeted 4 per cent real GDP growth for FY2027, while cautioning that normalisation of global energy prices depends on a durable US-Iran peace agreement. ("Renewed Middle East tensions pose downside risks to inflation, external sector: finance ministry," Dawn, 30 July 2026)
Exports to Europe fall to USD 9 billion in FY26
On 31 July, Dawn reported that Pakistan's exports to European markets recorded negative growth in FY26 despite continued GSP+ status, shrinking 0.18 per cent to USD 9.089 billion from USD 9.106 billion the previous year, according to State Bank data, raising policy concerns as Brussels has hinted any further GSP+ extension will hinge on compliance with human rights, press freedom and political rights; exports to northern Europe and the UK also dipped, by 1.31 and 0.55 per cent respectively, while southern and eastern Europe posted gains of 3.35 and 3.36 per cent, led by a 5.18 per cent rise in exports to Spain. Exporters face a further challenge in retaining market share amid the ongoing Middle East conflict and rising domestic input costs. ("Exports to Europe fall in FY26 despite GSP+," Dawn, 31 July 2026)
State Bank reserves fall by USD 1.4 billion in under a month
On 31 July, Dawn reported that the State Bank of Pakistan's foreign exchange reserves fell by USD 1.4 billion to USD 17 billion in under a month, including a USD 229 million decline in the week ended 24 July, even after exceeding the FY26 IMF target of USD 18 billion by reaching USD 18.4 billion; the country's overall foreign exchange holdings, including USD 5.412 billion held by commercial banks, stood at USD 22.442 billion for the week. Governor Jameel Ahmad told the Senate Standing Committee that Saudi Arabia had rolled over USD 5 billion and that the State Bank purchased USD 9 billion from the interbank market during FY26. ("State Bank of Pakistan reserves fall," Dawn, 31 July 2026)
State Bank reserves fall by USD 1.4 billion in under a month
On 31 July, Dawn reported that the State Bank of Pakistan's foreign exchange reserves fell by USD 1.4 billion to USD 17 billion in under a month, including a USD 229 million decline in the week ended 24 July, even after exceeding the FY26 IMF target of USD 18 billion by reaching USD 18.4 billion; the country's overall foreign exchange holdings, including USD 5.412 billion held by commercial banks, stood at USD 22.442 billion for the week. Governor Jameel Ahmad told the Senate Standing Committee that Saudi Arabia had rolled over USD 5 billion and that the State Bank purchased USD 9 billion from the interbank market during FY26. ("State Bank of Pakistan reserves fall," Dawn, 31 July 2026)
Government borrowing likely to continue aiding bank profits
On 01 August, Dawn reported that Pakistan's banking sector is likely to remain reliant on government borrowing for profits in the current fiscal year amid limited private-sector lending opportunities, with federal government borrowing from banks rising to PKR 5.9 trillion in FY26 from PKR 5.4 trillion the previous year, while the private sector received only around Rs1.4 trillion; the advance-to-deposit ratio fell to 35.2 per cent in June 2026 from 38.1 per cent a year earlier, among the lowest in the region, while the investment-to-deposit ratio stood at 104.2 per cent, reflecting continued bank preference for government securities. Bankers cited persistent regional uncertainty from the ongoing Middle East conflict and weak domestic investment appetite as reasons the trend is unlikely to shift in FY27. ("Banks likely to stay dependent on govt borrowing for profits," Dawn, 01 August 2026)
Board of Revenue collects PKR 820 billion in first month of FY27, beating target by PKR 40 billion
On 01 August, Dawn reported that the Federal Board of Revenue (FBR) collected PKR 820 billion in the first month of FY27, exceeding the PKR 780 billion target by PKR 40 billion and rising eight per cent year-on-year, driven mainly by higher-than-expected sales tax, federal excise duty and customs collection, while income tax fell PKR 15 billion short of its PKR 323 billion target; sales tax collection of PKR 360 billion beat its target by PKR 55 billion, growth officials attributed largely to inflation-driven gains and record petroleum development levy receipts from levy rates of up to PKR 120 per litre on petrol. The FBR issued PKR 99 billion in refunds and rebates during the month, up PKR 14 billion from a year earlier, against an annual FY27 revenue target of PKR 15.264 trillion. ("FBR beats July revenue target by Rs40bn," Dawn, 1 August 2026)
Food costs push short-term inflation up 9 per cent for 68th consecutive week
On 01 August, Dawn reported that short-term inflation, measured by the Sensitive Price Index, rose 9.05 per cent year-on-year for the week ending 30 July, marking its 68th consecutive weekly increase, driven mainly by rising perishable food prices and steadily climbing petroleum costs pushing up transportation expenses, even as the index fell 0.91 per cent week-on-week; the sharpest annual gains came in tomatoes (228.71 per cent), onions (95.36 per cent), wheat flour (78.65 per cent), diesel (37.42 per cent) and petrol (23.28 per cent), while potatoes, chicken and sugar saw annual declines. Week-on-week, 27 of the index's 51 items rose, six fell, and 18 held stable, according to the Pakistan Bureau of Statistics. ("Food costs push short-term inflation up 9pc," Dawn, 1 August 2026)
POLITICS & GOVERNANCE
Interior Minister assures KP and Balochistan traders of security and government support
On 31 July, Dawn reported that Interior Minister Mohsin Naqvi met with a delegation of traders and industrialists from Khyber Pakhtunkhwa (KP) and Balochistan, assuring them that the government would use all available resources to address their concerns and ensure their protection. Naqvi briefed the delegation on the overall security situation in both provinces and announced plans to visit Peshawar and Quetta for detailed consultations with the business community to work out a permanent and practical solution to the challenges they were facing. ("Govt will resolve your issues and ensure your protection, Naqvi tells traders from KP and Balochistan," Dawn, 31 July 2026)
Interior Minister calls for governance reset and new provinces, drawing sharp pushback
On 31 July, Dawn reported that Interior Minister Mohsin Naqvi called for a fundamental reset of Pakistan's governance system at the Pakistan Economic Summit, saying the current system had collapsed and was incapable of resolving the country's problems. He urged all political parties to sit together to settle outstanding issues, including the creation of new provinces, warning that without structural change the same debates would continue a decade from now. He also called for new leadership and said the youth needed justice, merit, and jobs rather than stipends and laptops.
On 01 August, Dawn also reported that Interior Minister Mohsin Naqvi's call for a governance reset sparked strong reactions across political circles. The Pakistan Peoples Party (PPP) referred the question to its Central Executive Committee (CEC), insisting that any new province required a two-thirds majority in the relevant provincial assembly, the National Assembly, and the Senate. Sindh Chief Minister Syed Murad Ali Shah flatly rejected the proposal, saying his province would never accept it. The Lahore High Court Bar Association (LHCBA) termed Naqvi's remarks unconstitutional, while the Sindhi nationalist group Awami Tehreek demanded his resignation, accusing him of promoting a division of Sindh. ("Naqvi calls for hard reset of ‘failed status quo’," Dawn, 31 July 2026; "Naqvi’s remarks ignite fresh debate in political circles," Dawn, 01 August 2026)
SECURITY
KP: TTP attacks checkpost in Hangu district, killing nine police personnel
On 30 July, Dawn reported that nine cops, including a deputy superintendent of police (DSP), were martyred and 28 others were injured after terrorists attacked the Khazina Banda checkpost in Khyber Pakhtunkhwa’s Hangu district. The Tehreek-i-Taliban Pakistan (TTP) terrorists ambushed the contingent, due to which an armoured personnel carrier was damaged. Separately, a police checkpost in the Adezai area, within the jurisdiction of Peshawar’s Mattani police station, was also attacked by terrorists. President Asif Ali Zardari and Prime Minister Shehbaz Sharif strongly condemned the attack on the Khazina Banda checkpost in Hangu. (“9 cops martyred, 28 injured as police checkpost comes under attack KP's Hangu,” Dawn, 30 July 2026)
Punjab: Rawalpindi police prepare security plan for “AJK” election in Rawalpindi division, deploy 4000 personnel
On 31 July, Dawn reported that more than 4,000 police personnel will be deployed to ensure foolproof security arrangements for the “Azad Jammu and Kashmir” Legislative Assembly elections, to be held on 02 August for the migrant seats of the Rawalpindi division. Polls in "AJK" are currently being held in three phases over security concerns, with the first set of polls held in Mirpur Division. A foolproof security plan had been devised to ensure the smooth conduct of the “AJK” Legislative Assembly elections, with the deployment of 4,029 police personnel. 175 polling stations had been set up for the elections in four constituencies of Rawalpindi Division: Attock, Jhelum, Chakwal, and Murree. The polling stations had been categorised as ‘A’ (highly sensitive), ‘B’ (sensitive) and ‘C’ (normal). Meanwhile, the regional administration and the now-banned Joint Awami Action Committee (JAAC) have been at odds over various issues, most notably the committee’s demand to abolish the 12 reserved seats in the region’s Legislative Assembly. (“Over 4000 police personnel to be deployed for security during AJK assembly elections in Rawalpindi division,” Dawn, 31 July 2026)
DG ISPR briefs media on nationwide counterterrorism operations; stresses good governance
On 31 July, Dawn reported that Inter-Services Public Relations (ISPR) Director General termed good governance “quintessential” for Pakistan’s security and stability in his remarks while addressing a press conference on the country’s overall security situation, particularly the situation in Balochistan. He said 40,348 intelligence-based operations had been conducted this year so far, adding that the figure included operations carried out by all security forces, including police, civil armed forces, intelligence agencies, and the armed forces. The majority of these operations were carried out in Balochistan, with the number exceeding 31,000. He further added that a total of 3,145 terrorism incidents had taken place in the country in 2026, of which 1,971 were reported from Khyber Pakhtunkhwa, 1,148 from Balochistan, and 26 from other parts of the country. The DG ISPR further stated that “819 Pakistanis have been martyred” in incidents of terrorism during the ongoing year, which amounted to four a day. This comprised 303 army personnel, 194 law enforcers, including police and civil armed forces personnel, and 322 civilians. (“Good governance 'quintessential' for security and stability of Pakistan: DG ISPR,” Dawn, 31 July 2026)
Balochistan: Chief Minister announces reintegration plan for terrorists willing to renounce violence
On 31 July, The Express Tribune reported that Balochistan Chief Minister Sarfraz Ahmed Bugti said the provincial government was willing to engage in political dialogue with opponents and offer rehabilitation to those willing to renounce violence. He also warned that security forces would continue action against militants who refused to lay down arms. Addressing the passing-out parade of the Anti Terrorism Force's 20th basic training course in Quetta, the chief minister said, “The door of political discourse is open for all, even though some factions are guilty of bloodshed.” He said the government had prepared a reintegration plan for those who abandoned militancy, under which they would be offered government jobs, education for their children, and healthcare facilities. He further highlighted that the government was reviewing proposals to improve the training of security personnel in line with evolving security challenges. (“Balochistan CM offers dialogue, rehabilitation to militants willing to surrender," The Express Tribune, 31 July 2026)
SOCIETY
Torture persists despite 2022 anti-torture law, warns Human Rights Commission
On 31 July, Dawn reported that the Human Rights Commission of Pakistan (HRCP) warned at a roundtable in Islamabad that torture and cruel treatment remained widespread four years after the Torture and Custodial Death (Prevention and Punishment) Act 2022 was passed, due to weak implementation and a lack of accountability. Experts noted that a United Nations Committee Against Torture review in 2026 raised the same concerns it had in 2017, showing that underlying structural problems had not been addressed. Participants called on Pakistan to establish clearer protocols to prevent arbitrary detention, amend Prison Rules in line with human rights standards, and ratify the Optional Protocol to the Convention Against Torture (OPCAT). ("HRCP calls for accountability as abuse persists despite anti-torture law," Dawn, 31 July 2026)
PROVINCES
Balochistan: Methane explosion at Quetta coalfield kills 32 miners
On 31 July, Dawn reported that rescue teams recovered 32 bodies from two coal mines in the Sorange coalfield, around 30 kilometres northeast of Quetta, after a methane gas explosion on 30 July caused a fire and partial collapse. Of the 34 miners working in both mines at the time, 32 were confirmed dead, and the search for the remaining two was ongoing. The Balochistan Minister for Mines and Minerals, Mir Shoaib Nosherwani, announced PKR 500,000 compensation for the families of each deceased miner and PKR 300,000 for each injured worker, and ordered an inquiry into the incident. ("At least 32 killed after coal mine explosion near Quetta; search under way for 2 miners," Dawn, 31 July 2026)
Punjab and Sindh: Urban flooding risk as reservoir levels rise sharply
On 01 August, Dawn reported that the Flood Forecasting Division (FFD) warned of urban flooding across major cities in Punjab and Sindh, including Lahore, Gujranwala, Sialkot, Faisalabad, Hyderabad, Badin, and Thatta, as the current monsoon spell intensified. Water levels at Tarbela Dam rose by over 32 feet in 15 days and are now just 13 feet below maximum capacity, while the Chenab at Marala could reach high flood level. The Provincial Disaster Management Authority (PDMA) Punjab confirmed that 45 people had been killed and 279 injured in rain-related incidents since the start of the monsoon season, with 33 deaths caused by roof and building collapses. ("Parts of Punjab, Sindh face urban flooding risk," Dawn, 01 August 2026)
Editorials/Opinions
The Middle East
Editorial, “Maritime alliance,” Dawn, 01 August 2026
"As the US-Iran war drags on, new battle lines are being drawn. The pro-US Gulf Arab monarchies and Iran have enjoyed a chequered history, specifically after the latter’s Islamic Revolution of 1979. But now, in the midst of the current conflict, the Arabs and Iranians are moving dangerously close to direct confrontation."
https://www.dawn.com/news/2019841/maritime-alliance
Politics & governance
Ghazan Jamal, “Not the right questions,” Dawn, 01 August 2026
“Given the divisive political slurs that normally eclipse serious political discussions, the debate on actual governance and performance was indeed a welcome change. However, that is where the positivity ended. While greater insight may elude the man on the street regarding service delivery and development, the questions and responses of policymakers, elected officials and senior anchorpersons leave much to be desired. This is particularly apparent during the budget season — in the days leading up to its announcement and immediately after the document is released. It was no different this year."
https://www.dawn.com/news/2019838/not-the-right-questions
Editorial, “Local governance,” Dawn, 01 August 2026
“Interior Minister Mohsin Naqvi’s speech at a business summit on Thursday has stirred a hornet’s nest. His diagnosis that the present system of governance is collapsing is correct. His call for political parties to sit together and resolve the country’s issues is welcome — although it will depend on the extent to which the government is willing to engage opposition parties. His warning that business as usual will neither deliver prosperity, nor create jobs, nor fix governance failures is also timely. But his proposed cure — creating smaller provinces on administrative grounds — rests on the flawed assumption that such an exercise will automatically bring the government closer to citizens and resolve governance problems."
https://www.dawn.com/news/2019840/local-governance
Economy
Farooq Arby, “Exchange rate dilemma,” Dawn, 01 August 2026
“Few economic issues provoke as much debate in Pakistan as the effect of the exchange rate on exports and the effectiveness of monetary policy when inflation is driven by supply-side factors. For now, we’ll focus on the nexus between the exchange rate and exports. While export-led growth remains a popular theme in policy discussions, an anti-export bias persists in practice. Unsurprisingly, despite decades of repeated policy failures, our approach to managing balance-of-payments remains unchanged. Policymakers have yet to accept that a market-based exchange rate and foreign exchange liberalisation are essential ingredients of a successful export strategy."
https://www.dawn.com/news/2019836/exchange-rate-dilemma
Date centres
Rafia Zakaria, “Dirty data centres,” Dawn, 01 August 2026
“It is commendable that Pakistan is building infrastructure for its technological future. It would be even more impressive if equal attention were given to the challenges that come with building it. The advancement of some Pakistanis should not come at the cost of further suffering for others already starved of water and electricity."
https://www.dawn.com/news/2019835/dirty-data-centres
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