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In Brief
EXTERNAL
Pakistan & US continue talks on reciprocal trade agreement
On 07 May, Dawn reported that Pakistan and the United States agreed to continue negotiations on outstanding issues under a proposed Agreement on Reciprocal Trade (ART), with Washington urging Islamabad to increase imports in an effort to narrow the bilateral trade imbalance. Pakistan’s Commerce Minister Jam Kamal and Commerce Secretary Jawad Paul held virtual talks with Deputy US Trade Representative Rick Switzer to discuss bilateral trade relations and broader economic cooperation. Both sides described the discussions as constructive and reaffirmed their commitment to pursuing a balanced and mutually beneficial trade framework, while Pakistani officials said only a limited number of technical issues remained under discussion between the two countries’ negotiating teams. (“Pakistan, US agree to continue trade talks,” Dawn, 07 May 2026)
US announces phased closure of consulate in Peshawar; Operations to move to Islamabad
On 06 May, Dawn reported that the US State Department announced the phased closure of its consulate in Peshawar, with diplomatic responsibilities for Khyber Pakhtunkhwa to be transferred to the US Embassy in Islamabad. Washington said the decision reflected concerns related to the safety of diplomatic personnel and efficient resource management, while insisting that US policy priorities in Pakistan remained unchanged and that engagement with officials and communities in Khyber Pakhtunkhwa would continue. The move, which, according to The Independent, had been under consideration for more than a year, is expected to save around USD 7.5 million annually and follows broader downsizing efforts under the Trump administration. The development also comes after heightened regional tensions and protests linked to the US-Israeli war against Iran earlier this year, including unrest outside the US Consulate in Karachi. (“US announces phased closure of Peshawar consulate, says operations will shift to Islamabad,” Dawn, 06 May 2026)
ECONOMY
Pakistan establishes SECP-backed capital market fund
On 06 May, Dawn reported that Pakistan's key capital institutions including Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), Pakistan Mercantile Exchange (PMX) and the Institute of Financial Markets of Pakistan (IFMP) established the Capital Market Development Fund (CMDF) under the auspices of Securities and Exchange Commission of Pakistan (SECP). It aimed at promoting financial literacy, expanding financial inclusion and increasing retail investor participation in the capital markets across the country. During the agreement ceremony, Chairman SECP highlighted that investor participation in Pakistan’s capital market remained below one per cent of the population despite recent growth. Also, Market insights shared during the ceremony indicated that approximately 24,000 new investors entered the market in April 2026. (“Capital Market Development Fund established to strengthen Pakistan's capital markets," Dawn, 06 May 2026)
Balance of payment crisis looms large amid rise in trade deficit
On 07 May, Dawn reported that a continuous surge in the trade deficit is putting pressure on the balance of payment, as final payments are bound to be cleared before 30 June, the end of the current fiscal year. Also, managed exchange rate has produced negative results as it made the dollar cheaper, allowing importers of luxury items like costly new vehicles to exceed all limits. The equity market in Pakistan has also witnessed massive outflows; inflows in the equity market during the first 10 months were USD 247 million, while outflows were USD 884 million. Foreign investments also remain weak, as 94 per cent of foreign investment in domestic bonds left the country. Financial experts observed that the country would face a current account deficit, and the size of the deficit could hit the reserves of the country hard, even if the inflow of remittances remained around USD 40 billion. (“Swelling trade gap hurting balance of payments,” Dawn, 7 May 2026)
Govt assures IMF targeted energy subsidies through BISP
On 07 May, The Express Tribune reported that the government has assured the International Monetary Fund (IMF) to end untargeted electricity subsidies for all residential consumers and give any further subsidies only through the Benazir Income Support Programme (BISP). This commitment has been given as part of the second review of the Resilience and Sustainability Facility (RSF). The IMF has imposed the condition as part of the USD 1.2 billion climate facility, which requires aligning energy sector reforms with Pakistan’s national climate change commitments. The government and the IMF were of the view that the targeted subsidies would also lead to a reduction in consumption of subsidised units, which would minimise the incentive for theft among lower-income consumers and thus lower energy prices. However, the BISP has only 10 million registered families in its database compared to about 22 million total users of electricity who consume up to 300 units. The government is already discouraging the use of solar-based power generation to compel people to buy expensive electricity from the national grid. (“Pakistan assures IMF to withdraw untargeted power subsidies in January,” The Express Tribune, 7 May 2026)
POLITICS & GOVERNANCE
PM Shehbaz's daughter and son-in-law acquitted in Punjab Saaf Pani Company corruption case
On 07 May, Dawn reported that an anti-corruption court in Lahore acquitted PM Shehbaz Sharif's daughter, Rabia Imran, and her husband, Ali Imran Yousaf, in a case of alleged irregularities at the Punjab Saaf Pani Company, after the judge found no evidence linking them to the alleged offence. The anti-corruption establishment had submitted an investigation report declaring both applicants innocent and the case not prosecutable. The judge also noted that an accountability court had discharged the other accused in the same matter in January 2022 without framing charges, and that neither NAB nor ACE had produced any new evidence since then. The couple had previously been declared proclaimed offenders for avoiding court proceedings before surrendering last month, when their arrest warrants were suspended. ("PM Shehbaz's daughter, son-in-law acquitted in graft case," Dawn, 07 May 2026)
JUI-F shutter-down strike over seminary raids crackdown affects Quetta and Balochistan
On 07 May, Dawn reported that a complete shutter-down strike was observed across Balochistan, including Quetta, on the call of Jamiat Ulema-e-Islam-Fazl (JUI-F) against government raids on unregistered religious seminaries. All shops, markets, and business establishments remained closed throughout the day, with traffic thin across the provincial capital. JUI-F workers carrying sticks were reported to have forcibly shut down shops that initially remained open, with police arresting around two dozen party workers before releasing them in the evening. Rallies and protest gatherings were held across Quetta, Qila Saifullah, Pishin, Khuzdar, Kalat, Ziarat, and over a dozen other districts, with speakers criticising not only the seminary raids but also inflation, corruption, worsening security, and administrative inefficiency. JUI-F Balochistan chief Senator Maulana Abdul Wasey announced a major protest gathering in Quetta on 10 May, describing the strike as a success and warning that the movement would continue until the raids stopped and authorities issued an apology. ("Quetta, other parts of province shut down," Dawn, 07 May 2026)
Imran and Bushra's counsel seeks adjournment of GBP 190 million appeals hearing, citing lack of instructions and jail access
On 06 May, Dawn reported that counsel for Imran Khan and Bushra Bibi, including Barrister Salman Safdar and PTI Secretary General Salman Akram Raja, filed an application before the Islamabad High Court seeking adjournment of the 7 May hearing in the GBP 190 million Al-Qadir Trust case, stating they were not authorised to argue the main appeals and had been unable to obtain instructions or fresh powers of attorney due to Adiala Jail authorities repeatedly denying them access to their clients. The lawyers stated their engagement was limited to arguing sentence suspension applications, and requested the court to issue strict directions to jail authorities to facilitate meetings. The development follows the IHC's rejection on 30 April of the couple's sentence suspension pleas, with the court having fixed the main appeals for hearing on 7 May. ("Counsel for Imran, Bushra seeks adjournment of May 7 hearing, says he is not authorised to argue main appeals in £190m case," Dawn, 6 May 2026)
CLIMATE CHANGE
At the Breathe Pakistan Climate Change Conference, experts warn Pakistan faces disproportionate climate risks despite low emissions
On 07 May, Dawn reported that policymakers, climate experts and international stakeholders at the Breathe Pakistan Climate Change Conference 2026 warned that Pakistan remains among the world’s most climate-vulnerable countries despite contributing less than one per cent of global carbon emissions. Senator Sherry Rehman criticised global climate agreements such as the Paris Agreement and Kyoto Protocol for overlooking the environmental impact of conflicts and military activity, warning that rising pollution, coastal threats and extreme heat were already having severe consequences for Pakistan. Climate Change Minister Musadik Malik highlighted the disparity between countries driving emissions and those suffering their consequences, while UN Resident Coordinator Mohamed Yahya said repeated climate disasters were imposing economic losses comparable to Pakistan’s IMF programme. Participants also stressed the need for climate finance reform, stronger implementation mechanisms and coordinated action on water security, urban planning and air pollution. The two-day event was organised by Dawn Media. (“Call for urgent action, equitable climate finance, stronger global-local coordination,” Dawn, 07 May 2026)
Experts call for evidence-based water governance as climate change threatens Indus Delta
On 07 May, Dawn reported that policymakers and climate experts at the Breathe Pakistan Climate Conference 2026 urged Pakistan to adopt evidence-based, people-centric water governance policies as climate change accelerates glacier melt and threatens the Indus Delta. Water Resources Minister Mian Muhammad Moeen Wattoo warned that shrinking glaciers and advancing sea intrusion were endangering downstream communities and food security, stressing that water management had become a necessity rather than an option. Experts, including water policy specialist Erum Sattar and glaciologist Davide Fugazza, highlighted growing pressures on the Indus Basin from climate change, regional tensions and weak governance systems, while panellists criticised reliance on ad hoc policies and called for long-term planning, scientific approaches and nature-based local solutions instead of heavy infrastructure projects such as mega dams. (“‘Govt must put people, evidence at heart of water management’,” Dawn, 07 May 2026)
JUDICIARY
CJP Afridi says Supreme Court and Federal Constitutional Court are coordinate courts under 27th Amendment
On 06 May, Dawn reported that Chief Justice of Pakistan, Yahya Afridi, ruled that the constitutional framework created after the 27th Constitutional Amendment treats the Supreme Court of Pakistan and the Federal Constitutional Court (FCC) as coordinate courts with clearly demarcated jurisdictions rather than a hierarchical relationship. In a 13-page order, the Chief Justice stated that Article 189(1) of the Constitution, which makes FCC decisions binding on all courts, including the Supreme Court, could not be interpreted as subordinating one apex court to another. The ruling clarified that all writ proceedings - except rent and family matters - fall under the FCC’s jurisdiction, while regular proceedings remain with the Supreme Court, with pending cases to be routed accordingly. The order also acknowledged the possibility of conflicting rulings between the two courts on similar legal questions following the establishment of the FCC under the controversial amendment passed in November 2025. (“SC, FCC operate as coordinate courts, exercising clearly demarcated jurisdictions: CJP Afridi,” Dawn, 06 May 2026)
SECURITY
Pakistan marks first anniversary of India conflict with ISPR warning of stronger response to any future aggression
On 07 May, Dawn reported that the Inter-Services Public Relations (ISPR) issued a statement marking the first anniversary of the military conflict with India that began with the Pahalgam attack on 22 April 2025 and ended with a ceasefire on 10 May 2025, warning that any future hostile designs against Pakistan would be "countered with even greater strength, precision and resolve far stronger than what was witnessed by the adversary." Pakistan Air Force Chief Air Marshal Zaheer Ahmed Baber Sidhu, addressing a commemorative ceremony, said that when India launched its attack in the early hours of 07 May 2025, PAF mobilised jets and denied the Indian Air Force entry into Pakistani airspace despite being outnumbered, shooting down multiple enemy jets within minutes and conducting what he described as "full-spectrum multi-domain operations unprecedented in the history of aerial warfare." Foreign Minister Ishaq Dar separately saluted the armed forces and the Pakistani people, describing the response as "measured, responsible and precise," while reaffirming Pakistan's commitment to dialogue and diplomacy alongside its readiness to defend its sovereignty by all means available. ("Marka-i-Haq: ISPR says any hostile design against Pakistan will be countered with greater strength, resolve," Dawn, 07 May 2026)
Pakistan and the US-Iran War
Pakistan continues push for permanent US-Iran ceasefire
US and Iran close to memorandum to end war, says Pakistani source; Some US demands regarding nuclear issue remain unacceptable, says Iranian officials
On 07 May, The Express Tribune and Dawn reported that Pakistan intensified diplomatic efforts to secure a permanent end to the US-Iran conflict following renewed tensions over the Strait of Hormuz and ongoing negotiations between Iran and the United States. The situation briefly escalated after US President Donald Trump announced “Project Freedom” to escort ships through the Strait of Hormuz, prompting Iranian accusations that the move violated the ceasefire and fears of renewed war after reported strikes near Fujairah in the United Arab Emirates. Pakistani mediation, supported by Saudi Arabia and other regional actors, reportedly helped persuade Washington to pause the naval initiative, while Prime Minister Shehbaz Sharif and Foreign Minister Ishaq Dar said Islamabad was working to turn the indefinitely extended ceasefire into a lasting settlement.
Meanwhile, Iranian officials confirmed that a US proposal conveyed through Pakistani mediation remained under review, while reports from Axios and Reuters suggested both sides were nearing agreement on a one-page memorandum aimed at ending the war and launching broader negotiations. According to the reports, the proposed framework could include a temporary moratorium on uranium enrichment, phased sanctions relief, the release of frozen Iranian funds and arrangements related to transit through the Strait of Hormuz, although Tehran stressed that some US demands remained unacceptable and that nuclear issues were not yet fully under discussion. Pakistani officials remained largely tight-lipped about the negotiations, though diplomatic sources described Islamabad’s role as crucial in maintaining communication channels and preventing a collapse in talks amid heightened regional tensions and global economic concerns over disrupted energy supplies. (“Pak efforts keep ceasefire alive,” The Express Tribune, 07 May 2026; “Iran says US proposal 'still under review,' response to be conveyed through Pakistani mediators,” The Express Tribune, 06 May 2026; “Pakistan pushes for permanent peace in US-Iran conflict: PM,” The Express Tribune, 06 May 2026; “Dar says Pakistan's focus is now on making US-Iran ceasefire permanent,” Dawn, 06 May 2026)
Editorials/Opinions
US-Iran War
Editorial, "A breakthrough?" Dawn, 07 May 2026
"It appears that despite confrontational rhetoric from both sides, a more long-term agreement on cessation of hostilities between the US and Iran may be within reach. The whole world would welcome an end to this pointless war. The US needs to lift its blockade of Iranian ports, and give Tehran sanctions relief and other CBMs, particularly a commitment not to attack it again, so that there can be a genuine move towards peace. And Iran, for its part, must ensure free movement to facilitate stable energy supplies."
https://www.dawn.com/news/1998246/a-breakthrough
Inam Ul Haque, "Lessons from Iran war - warfare and warfighting," The Express Tribune, 07 May 2026
"Every major war, involving newer weapons, strategies and concepts, redefines warfighting. However, the laws of warfare remain unchanged, as these are essentially the function of human cognition, resources and systems. A lot has been written on the new dimensions and percepts of 'non-contact' warfare after the conflict between Azerbaijan and Armenia in September 2023, the ongoing war in Ukraine, the Indo- Pak stand-off in May 2025 and the US-Israeli war on Iran in June 2025 and recently since February 2026. These conflicts have lessons for militaries, as every war sends strategists and tacticians back to the drawing board. The coalition's ongoing war on Iran demonstrates some interesting insights which this series would attempt to cover, benefiting from AI-based internet research."
https://tribune.com.pk/story/2606700/lessons-from-iran-war-warfare-and-warfighting
Climate change
Ali Tauqeer Sheikh, "Layers of climate resilience," Dawn, 07 May 2026
"Iran's war has lessons for Pakistan. Can Iran survive half a century of technological and trade embargoes and infrastructural bombardment? While GDP and foreign reserves are standard metrics of survival, Iran has shown that national endurance is actually measured by the depth of human capital. Even if the political order crumbles, Iran’s foundational capacity to innovate remains an indestructible strategic armour, a result of a deliberate immersion in science, technology, engineering and mathematics that created a workforce capable of withstanding shocks that could disintegrate less complex societies."
https://www.dawn.com/news/1998251/layers-of-climate-resilience
Disaster risk reduction
Richard Choularton, "Risk readiness," Dawn, 07 May 2026
"Pakistan is learning, year after year, what it means to live on the front lines of the climate crisis. Floods and droughts don’t end when the waters recede or the rains return; each brings a major economic shock, development setbacks, and humanitarian impacts that last for years. The next monsoon is less than three months away. Scaling disaster risk financing is one of the most practical steps Pakistan and its partners can take this year to protect both the most vulnerable and the development gains they have helped build."
https://www.dawn.com/news/1998247/risk-readiness
Health
Editorial, "Silent AIDS epidemic," The Express Tribune, 07 May 2026
"Pakistan now holds the unenviable distinction of being home to one of the fastest-growing HIV epidemics in the WHO Eastern Mediterranean Region, which covers 22 countries in West Asia, North Africa, the Horn of Africa and Central Asia. New infections have surged by an alarming 200 per cent over the last 15 years, rising from 16,000 in 2010 to 48,000 in 2024. But even worse is the fact that public awareness campaigns and harm reduction strategies have been almost completely ineffective. Just this week, the National Assembly's Standing Committee on Health was told that nearly 20,000 patients out of 84,000 registered have gone "missing" after initiating antiretroviral therapy. That means they are walking around with potentially contagious levels of the virus in their systems."
https://tribune.com.pk/story/2606697/silent-aids-epidemic
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