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In Focus
IMF reaches staff-level agreement with Pakistan on USD 1.2 billion financing
Pakistan to receive USD 1 billion under Extended Fund Facility and USD 210 million under Resilience and Sustainability Facility; IMF urges SOE reforms
On 08 October, Dawn and The Express Tribune reported that the International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on the fourth review of its USD 7 billion Extended Fund Facility (EFF) and the third review of the USD 1.4 billion Resilience and Sustainability Facility (RSF). Subject to Executive Board approval, Pakistan will receive about USD 1 billion under the EFF and USD 210 million under the RSF, taking total disbursements under both programmes to around USD 5.7 billion. The IMF also concluded its 2026 Article IV consultation, saying programme implementation remained broadly on track despite geopolitical and energy-market pressures.
The IMF said Pakistan’s real GDP growth reached 4 per cent during the first three quarters of FY26, with full-year growth estimated at 3.6 per cent, while inflation moderated to around 10.3 per cent in September. Gross foreign exchange reserves rose to about USD 21.5 billion by the end of September, supported by strong remittances, while the current account remained broadly balanced. However, the Fund warned of risks from geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions. It called for continued fiscal discipline, tax reforms, energy-sector reforms and an appropriately tight monetary policy.
The agreement follows negotiations in which the IMF had also pressed Pakistan to reform the governance of state-owned enterprises, with officials indicating that amendments to several SOE laws remained an important programme requirement. The Fund urged stronger public financial management, reductions in debt rollover risks, improved electricity-sector efficiency and better-targeted social protection. It also called for the prompt phasing out of the fuel support scheme and continued climate reforms under the RSF. Pakistan’s government has sought to maintain macroeconomic stability while advancing reforms intended to support private investment, exports and longer-term economic growth. (“Pakistan, IMF reach staff-level agreement for $1.2bn tranche,” Dawn, 08 October 2026; “IMF tranche tied to SOE reforms,” The Express Tribune, 08 October 2026)
In Brief
SOCIETY
Poverty in Pakistan highest in region, finds World Bank data
On 07 October, Dawn reported that as per World Bank data, Pakistan was home to almost half of the extremely poor population in the entire Middle East, North Africa and Afghanistan-Pakistan (Menaap) region. Menaap is the only region in the world in which poverty remains above pre-pandemic levels and continues to rise. Pakistan accounts for nearly half of the region’s extreme poor. It is estimated that Pakistan's GDP growth would increase from 3.2 per cent in FY25 to 3.7 per cent in FY26 and 3.8 per cent in FY27, as services, manufacturing and livestock production remain resilient despite rising import costs. The burden of poverty was highly concentrated in the region. Pakistan accounts for about 48 per cent of the people in the region living below the USD 3.00 per day poverty line. Afghanistan, the Syrian Arab Republic and the Republic of Yemen together account for another 47 per cent. (“Pakistan drives regional rise in poverty levels,” Dawn, 07 October 2026)
Human Rights Commission raises concerns over overcrowding in Punjab prisons
On 07 October, Dawn reported that the Human Rights Commission of Pakistan (HRCP) has called for urgent reforms to the criminal justice system as prisons across the country remain severely overcrowded. Punjab’s 45 prisons were operating at more than 190 per cent of their designated capacity in September. Particularly, Punjab’s 45 prisons were operating at more than 190 per cent of their designated capacity in September. According to the latest Punjab prison data cited in the report, the province had 74,773 prisoners against a designated capacity of 39,204 in September 2026, translating into overcrowding of 190.73 per cent. HRCP said in its policy paper, Beyond the Prison Wall: Reducing Overcrowding in Pakistan’s Prisons, that prison overcrowding was not merely a matter of building more jails but a symptom of deeper problems, including ineffective bail mechanisms, prolonged trials, slow investigations and limited use of probation and parole. The report said the continued dominance of under-trial prisoners reflected an “overreliance” on pre-trial detention, ineffective bail, prolonged judicial processes and custodial measures. (“HRCP for criminal justice reforms to address Punjab prison overcrowding,” Dawn, 07 October 2026)
POLITICS & GOVERNANCE
PM Shehbaz and JI chief to hold deliberations on fuel levy
On 07 October, Dawn reported that Prime Minister Shehbaz Sharif planned to have formal talks with the Emir of the Jamaat-i-Islami (JI), Hafiz Naeemur Rahman, over the fuel levy. Planning Minister Ahsan Iqbal contacted the JI Vice Emir Liaqat Baloch over prospective talks between the government and the JI. Baloch stated that Sharif had requested Iqbal to finalise a mutually agreed schedule for a meeting between the PM and Rahman. This comes after the JI launched a campaign demanding the complete abolition of the petroleum levy, and relief for consumers from high energy costs. (“JI chief to discuss fuel levy with PM Shehbaz,” Dawn, 07 October 2026)
Emergency will be imposed if regarded as essential, says KP governor
On 07 October, Dawn reported that Khyber Pakhtunkhwa Governor Karim Kundi had stated that emergency or governor’s rule would definitely be imposed on the province if necessary. Kundi made the remarks during a Geo News programme, arguing these measures would definitely be enforced if the president or prime minister regarded it as essential to “save the province.” The governor also stated the first thing to decide would be when and whether an emergency or governor’s rule would be imposed. He further informed that sustainability would be discussed later. Kundi also accused the provincial government in KP led by the PTI of “facilitating terrorism” and not doing enough to prevent it. The governor’s remarks came after threats by the Pakistani government of imposing emergency or governor’s rule in KP. There are growing tensions amidst the PTI’s plans for a protest march demanding the release of its founder Imran Khan. Earlier, Interior Minister Mohsin Naqvi had called on Kundi to discuss the political and security situation in KP. (“Emergency, governor’s rule would ‘definitely’ be imposed if deemed necessary to ‘save’ KP: Kundi,” Dawn, 07 October 2026)
ECONOMY
Digital channels account for 92 per cent of total retail payment transactions
On 07 October, Dawn reported that according to an annual report released by the State Bank, Digital channels accounted for 92 per cent of total retail payment transactions in the fiscal year 2025-26, up from 88 per cent in FY25. The “Annual Report on Payment Systems” said that out of 14.3 billion transactions conducted through formal banking channels, 13.2 billion transactions were conducted through digital channels, representing year-on-year growth of 65 per cent. Retail payments through formal banking channels registered significant growth during FY26, reaching 14.3 billion transactions valued at PKR 673 trillion, representing year-on-year growth of 58 per cent in volume and 10 per cent in value. Mobile phone-based solutions led the digital surge with over 11.1 billion transactions, registering a 79 per cent growth, while internet banking portals processed 300 million transactions, up 15 per cent from the previous fiscal year. (“92pc of retail transactions are digital state bank,” Dawn, 07 October 2026)
Salaried class pays PKR 144 billion in income tax in current fiscal year
On 07 October, The Express Tribune reported that the salaried class has paid PKR 144 billion in income tax in this fiscal year, which is PKR 90 billion more than the taxes paid by the retail and realty sectors. It highlights a widening disparity under the International Monetary Fund (IMF) programme that has endorsed a 50 per cent cut for real estate and a fixed tax scheme for retailers. Official records of the past two fiscal years and provisional figures of the first quarter (July-September) of the current fiscal year suggested that at the completion of two years of the IMF programme, the tax contribution of the salaried class had multiplied. According to tax officials, the income tax collection from the salaried class amounted to PKR 144 billion during the July-September period of the current fiscal year. It was higher by PKR 13.4 billion, or 10.2 per cent, compared to the same period of last year. In the budget, the government claimed that it had given a PKR 52 billion relief to the salaried class by up to a 3 per cent reduction in the tax rate and abolishing the 9 per cent surcharge calculated on the basis of the highest tax rate of 35 per cent. It also increased the applicability limit of the maximum tax rate of 35 per cent from PKR 4.1 million to PKR 7 million annually. The salaried class, like other middle- and lower-middle-income groups, is also adversely impacted by the government's decision to fully recover international oil prices, charge a petroleum levy of PKR 80 per litre and a climate support levy of PKR 5 per litre. The daily price fluctuation is also causing a hike in fruit and vegetable prices. (“IMF taxes squeeze salaried class,” The Express Tribune, 07 October 2026)
SECURITY
Narcotics worth approximately USD 96 million seized by the navy, says ISPR
On 07 October, Dawn reported that the Inter-Services Public Relations (ISPR) stated that the Pakistan Navy Ship Yarmook conducted the operations and seized approximately 850 kilogrammes of ice and 2,000 kilogrammes of cannabis, worth approximately USD 96 million. The ISPR noted that this reflects Pakistan’s “commitment to regional maritime security and the fight against illicit trafficking at sea.” President Asif Ali Zardari stated that “the navy’s role in preventing illegal activities within the country’s maritime boundaries and safeguarding regional maritime security was commendable.” Interior Minister Mohsin Naqvi also made a statement, highlighting the navy’s role in regional maritime security and praising the “successful and timely” operations conducted. This comes in the backdrop of another reported raid conducted last month, seizing narcotics worth USD 750 million dollars in the Arabian Sea. (“Pakistan Navy conducts 2 counter-narcotics operations, seizes drugs worth $96m: ISPR,” Dawn, 07 October 2026)
KP & Balochistan: 18 terrorists killed in multiple operations, Pakistan TV reports
On 07 October, Dawn reported that 18 terrorists were killed in separate engagements in Khyber Pakhtunkhwa and Balochistan, according to state media. Pakistan TV reported that in KP, during an intelligence-based operation in North Waziristan, 13 Tehreek-e-Taliban Pakistan (TTP) terrorists were killed. Separately, five more terrorists were reportedly killed in Balochistan’s Mastung district. Moreover, security forces recovered weapons and ammunition, while clearance and search operations were underway under "Operation Radd-ul-Fitna Three". Additionally, President Asif Ali Zardari and Prime Minister Shehbaz Sharif commended the work of the security forces. President Zardari stated that this was “a clear expression of the firm resolve against terrorist elements.” Prime Minister Sharif noted that operations against the TTP will continue until the complete elimination of terrorism from the country. (“18 terrorists killed in separate engagements in KP, Balochistan: state media,” Dawn, 07 October 2026)
KP: Seven policemen injured in checkpost attack in Kohat
On 07 October, Dawn reported that seven policemen were injured in an attack by terrorists on a police checkpost in Kohat. According to police sources, terrorists threw a hand grenade at the checkpost; however, they stated that “the attack was successfully repulsed. The injured cops are safe.” Khyber Pakhtunkhwa information minister Shafi Jan condemned the attack, stating that the attack was “extremely regrettable and cowardly.” Furthermore, Minister Jan stated that the provincial government had enhanced the capacity of the Khyber Pakhtunkhwa police and the Counter Terrorism Department (CTD), and equipped police with modern weapons and technology. This comes in the background of an 83 per cent increase in violence-linked fatalities during the third quarter of 2026, as identified by the Pakistan Centre for Research and Security Studies. Moreover, Balochistan and KP reportedly accounted for 98 per cent of all fatalities during the period. (“7 cops injured as police checkpost comes under attack in KP's Kohat,” Dawn, 07 October 2026)
EXTERNAL
Pakistan and UK agree to tighten action on illegal migration, with fake student visas flagged
On 08 October, The Express Tribune reported that Interior Minister Mohsin Naqvi and Minister of State Talal Chaudhry met UK Minister of State for Foreign Affairs Stephen Doughty in Islamabad, where both sides agreed on closer coordination against illegal immigration, drug trafficking and terrorism, and stressed the need for strict measures to stop the growing trend of travelling to the UK on fake student visas. ("Pakistan, UK agree to curb illegal migration," The Express Tribune, 08 October 2026)
Pakistan presses UN committee on climate finance, debt reform and respect for water treaties
On 07 October, Dawn reported that Ambassador Usman Jadoon, Pakistan's deputy UN representative, told the General Assembly's Second Committee that Pakistan wants a credible pathway to mobilise USD 300 billion in climate finance, tripled adaptation finance and a properly capitalised Loss and Damage Fund, while urging the 2026 and 2028 UN Water Conferences to uphold the sanctity of existing treaties, a pointed reference given South Asia's transboundary water tensions. He also called for reform of the international debt architecture, noting the annual USD 4 trillion SDG financing gap, a restored WTO dispute settlement system, and attention to AI as a potential new development divide. ("Pakistan urges action on climate finance, respect for water treaties at UN," Dawn, 07 October 2026)
Vatican foreign relations chief to make first-ever Pakistan visit as ties mark 75 years
On 08 October, Dawn reported that Archbishop Paul Richard Gallagher, the Holy See's secretary for relations with states and international organisations, will visit Pakistan from 08 to 10 October at Foreign Minister Ishaq Dar's invitation, the first visit by anyone in that post and one that coincides with the 75th anniversary of Pakistan-Vatican diplomatic relations. He is expected to meet Dar and PM Shehbaz Sharif to discuss interfaith harmony, dialogue and peace, and to interact with Pakistan's Catholic community. ("Vatican envoy to visit Pakistan from Oct 8-10: FO," Dawn, 8 October 2026)
Bahrain foreign minister arrives in Islamabad to co-chair third Joint Ministerial Commission
On 07 October, Dawn reported that Bahraini Foreign Minister Abdullatif bin Rashid Al Zayani arrived in Islamabad for a two-day visit to co-chair the third session of the Pakistan-Bahrain Joint Ministerial Commission with Ishaq Dar, with talks expected to cover trade, investment, defence and security, labour and manpower, and cultural exchanges. It is the commission's first session since July 2021 in Manama, and follows a September meeting between the two ministers at the UN General Assembly where Bahrain praised Pakistan's role in regional stability. ("Bahrain's foreign minister arrives in Islamabad for 2-day visit," Dawn, 07 October 2026)
CDF Munir and UN Secretary-General discuss Indus Waters Treaty and Afghan terrorism
On 07 October, Dawn reported that Chief of Defence Forces Field Marshal Asim Munir met UN Secretary-General António Guterres at GHQ Rawalpindi, where they exchanged views on regional stability, the Jammu and Kashmir dispute, India's suspension of the Indus Waters Treaty (IWT) and terrorism emanating from Afghanistan, with Munir highlighting Pakistan's UN peacekeeping contributions and Guterres paying tribute to its sacrifices against terrorism and its efforts to resolve regional conflicts peacefully. Earlier in his visit, Guterres praised Pakistan's "pivotal role" in mediating between the US and Iran, and President Asif Ali Zardari conferred the Nishan-i-Imtiaz on him. ("CDF Munir reaffirms Pakistan's commitment to international peace in meeting with UN chief," Dawn, 07 October 2026)
Pakistani forces already in Saudi Arabia; Makkah pact "did not come out in a vacuum", says DG ISPR
On 07 October, Dawn reported that ISPR Director General Lt Gen Ahmed Sharif Chaudhry told CNN that Pakistani forces, "in multiple capabilities and domains," are already in Saudi Arabia and have been for decades, adding that the Makkah Defence Alliance builds on a sustained diplomatic, political, military and people-to-people relationship between Pakistan, Turkiye and Saudi Arabia. His remarks follow Monday's emergency meeting of the alliance's Strategic Political and Defence Committee in Riyadh, where the three countries agreed to rapidly deploy agreed forces and capabilities in the kingdom amid Houthi attacks, and Defence Minister Khawaja Asif's statement that Pakistani and Turkish forces are in a supportive role, including reconnaissance, while only Saudi troops are in combat. ("DG ISPR says Pakistani troops present in Saudi Arabia 'for decades' across multiple domains," Dawn, 7 October 2026)
ON INDIA
Law minister raises Indian suspension of IWT with UK
On 07 October, Dawn reported that Law Minister Nazeer Tarar raised the issue of the Indian suspension of the Indus Water Treaty (IWT) with the UK. The issue was brought up during a meeting between Tarar and senior UK government officials, including the UK Minister of State Stephen Doughty and the British High Commissioner. In a statement, Tarar said that India's suspension of the IWT went beyond the mechanisms provided under the treaty and water-related issues needed to be addressed in accordance with international law and the existing treaty framework. He also stressed the linkages between protection of water resources and the economy, food security and the well-being of the Pakistani population. Meanwhile, Doughty highlighted the need for cooperation and engagement in resolving water crises. He also stated that water and climate change were directly linked to agriculture, human security and efforts to prevent and respond to disasters. (“Law minister raises India’s act of suspending Indus Water Treaty with British counterpart,” Dawn, 07 October 2026)
Editorials/Opinions
Politics & governance
Editorial, “Conundrum,” Dawn, 08 October 2026
"Neither side, it seems, has committed fully yet. Both the government and the opposition have engaged in a lot of political chest-beating since the breakdown of negotiations early Sunday, but they have both also left the door open for resumption of dialogue."
https://www.dawn.com/news/2035601/conundrum
Nutrition crisis
Editorial, “The healthy-food gap,” Dawn, 08 October 2026
“Pakistan's nutrition problem is usually blamed on poverty, poor eating habits or lack of awareness. But according to the FAO, the country simply does not produce enough of many foods people need for a healthy diet. Vegetables, fruits, pulses, roots and tubers remain in short supply, while staples and sugar are produced in greater quantities than a healthy diet requires. This means families are being asked to eat better in a system that often makes the healthier choice harder to find and more expensive. For decades, agricultural policy has focused heavily on major crops and food security in terms of calories. Much less attention has been paid to whether people are getting a balanced diet. That imbalance now shows clearly."
https://www.dawn.com/news/2035599/the-healthy-food-gap
Economy
Khurram Husain, “Talking about the exchange rate,” Dawn, 08 October 2026
“There is an enduring consensus in Pakistan that the exchange rate should not be allowed to move by much as a matter of routine, and that determining its level is a matter of discretion for the state."
https://www.dawn.com/news/2035606/talking-about-the-exchange-rate
On Afghanistan
Inam Ul Haque, “Afghanistan - losing the cause!” The Express Tribune, 08 October 2026
“The relations between Pakistan and the Afghan Taliban regime are in freefall, with no improvement likely in the near to mid-term. The IEA will not budge on the TTP, and Islamabad will not give an inch on its core demand that Kabul rein in the TTP and not permit Afghan soil to be used against Pakistan. The IEA refusal acts in open violation of the 2020 Doha Agreement, and shows complete disregard for the precepts of neighbourly obligations under gawandgiri (neighbourliness), Islamic amity and pashtunwali."
https://tribune.com.pk/story/2633553/afghanistan-losing-the-cause
External
Editorial, “Guterres in Pakistan,” The Express Tribune, 08 October 2026
“Pakistan's diplomatic contributions to global peace and security have been highly eulogised. UN Secretary-General Antonio Guterres, on a farewell visit to Islamabad as he relinquishes his high office, commended the country's "pivotal role" in mediating between the US and Iran, and called on both parties to end the conflict and return to diplomacy. The tribute was unparalleled, as the world body chief went on to term the Islamabad MoU a "frame for future negotiations" while expressing hope that better sense would prevail to save the world from another impending catastrophe."
https://tribune.com.pk/story/2633549/guterres-in-pakistan-1
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