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In Focus
Major reduction in development spending approved
National Economic Council cuts spending by PKR 1.046 trillion; Growth rate target of 4 per cent approved
On 11 June, Dawn and The Express Tribune reported that Pakistan’s National Economic Council (NEC) unanimously approved a major reduction in development spending for FY2026-27, cutting the national development outlay by PKR 1.046 trillion to PKR 3.669 trillion. The federal Public Sector Development Programme (PSDP) was reduced from PKR 1.126 trillion to PKR 1 trillion, while provincial Annual Development Plans fell from PKR 3.138 trillion to PKR 2.218 trillion, with Punjab seeing the steepest cut. The move aims to generate around PKR 800 billion in fiscal space amid budget pressures and strategic spending requirements. The NEC also approved macroeconomic targets, including 4 per cent GDP growth and 8.2 per cent inflation.
Officials also stated that the development reductions would be accompanied by limits on launching new projects outside the defence and interior sectors, while preserving allocations for existing priorities. Prime Minister Shehbaz Sharif said the Centre and provinces reached decisions through consultation and stressed export-led growth, employment creation and stronger federal-provincial coordination. Khyber Pakhtunkhwa Chief Minister Sohail Afridi said discussions also included updating the NFC Award within 180 days and securing financial arrangements for merged districts ahead of the federal budget presentation scheduled for 12 June. (“National uplift outlay for next fiscal cut by over Rs1tr,” The News International, 11 June 2026; “Centre, provinces 'made decisions in the best interest of Pakistan', PM says in NEC meeting,” Dawn, 10 June 2026; “K-P secures major gains on NFC award, tribal districts' funding in NEC meeting,” The Express Tribune, 10 June 2026; “Finance Minister Aurangzeb to present budget for FY2026-27 on June 12,” Dawn, 10 June 2026)
In Brief
EXTERNAL
Exports to five Central Asian countries decline by 8.62 per cent
On 11 June, Dawn reported that, due to route closures leading into Afghanistan, Pakistan's exports to Central Asian countries (CACs) have seen a decline. Pakistan has since exported products to these countries via Iran, though large distances inhibit the volume of trade. The value of exports to CACs fell 8.62 per cent, as imports from the region fell by 87.96 per cent. Uzbekistan has implemented a trade agreement with Pakistan, and thus was the only CAC without negative import growth from Pakistan. Exports to Turkmenistan faced a decline of 28.64 per cent, and imports recorded a negative growth of 58.10 per cent. Export value to Uzbekistan climbed 38.27 per cent, whereas imports declined by 84.83 per cent. Kazakhstan faced a 17.57 per cent export decline, and Pakistan’s exports to Kyrgyzstan suffered a 7.44 per cent decline. Exports to Tajikistan were down 63.22 per cent, while imports declined 79.89 per cent. (“Pakistan’s trade with Central Asia faces snags,” Dawn, 11 June 2026)
Pakistan committed to stronger relationship with Russia, says President Zardari
On 11 June, The News International reported that President Asif Ali Zardari, during an Islamabad reception to commemorate the National Day of the Russian Federation, emphasised the importance of Pakistan’s relationship with Russia. “Pakistan values Russia as a global power and a trusted power”, he said. Zardari congratulated Russian President Vladimir Putin, Ambassador Albert P Khorev and Russian citizens at large on the occasion. He also mentioned his 2011 visit to Russia as a positive experience, citing Putin’s reception as a reason for bringing the states closer. Zardari commented on the 1300 Pakistani students studying in Russia, viewing them as a bridge between the two societies. Ambassador Khorev, in his address, expressed condolences over the Mi-17 helicopter crash and highlighted the importance of Russia’s multilateral cooperation. Khorev also expressed appreciation of Pakistan’s neutral stance in the Russia-Ukraine war. (“Pakistan committed to bolstering partnership with Russia: Zardari,” The News International, 11 June 2026)
ECONOMY
Government plans to give relief to some salaried segments in upcoming budget
On 11 June, Dawn reported that in the upcoming budget, significant relief is planned for salaried individuals earning between PKR 230,000 and PKR 341,000 a month. Also, the maximum salary tax rate is under consideration for a cut to around 30 per cent from the existing 35 per cent. However, no visible changes are expected for individuals drawing between PKR 100,000 and PKR 183,000 per month, a bracket where a large segment of the salaried class falls. The applicable tax for this group remains PKR 500 plus 11 per cent of income above PKR 100,001. The Shehbaz Sharif-led coalition government is set to unveil fresh tax measures worth PKR 660 billion to PKR 700 billion in the 2026-27 budget. The government has pledged to raise an ambitious PKR 15.3 trillion in tax revenue through the Federal Board of Revenue in FY2026-27. Revenue collection could face setbacks due to a lower-than-expected allocation for the federal Public Sector Development Programme, which includes fewer new projects and remains notably smaller than those of the Punjab and Sindh provinces. (“Income tax may fall for some salaried segments,” Dawn, 11 June 2026)
Pakistan receives highest workers’ remittances in May
On 10 June, Dawn reported that in May, workers' remittances were recorded at USD 4.3 billion, registering growth on both a monthly and annual basis. According to the State Bank of Pakistan data, the inflows increased by 20.2 per cent compared to April and were 15.4 per cent higher than the amount received in May last year. Cumulatively, remittances reached USD 38.1billion during July-May FY26, up 9.2 per cent from USD 34.9 billion recorded in the corresponding period of the previous fiscal year. Remittances from Saudi Arabia remained the highest in May at USD 1,025 million, followed by USD 1,006.6 million from the United Arab Emirates (UAE). Remittances from the United Kingdom stood at USD 645.5 million and those from the US at USD 349.8 million. Pakistan is among the top countries receiving large foreign exchange inflows through remittances. While a growing number of job seekers leaving the country is termed by some economists as brain drain, the government considers it beneficial for the external balance. (“May sees 'highest ever monthly inflow' of workers remittances at $43bn,” Dawn, 10 June 2026)
Government extends austerity measures until 30 June
On 10 June, The Express Tribune reported that the government on Wednesday extended a series of austerity measures until 30 June and allowed standalone grocery and kiryana stores to remain open until 10 pm. The decisions were taken during a meeting of the Committee for Monitoring and Implementation of Fuel Conservation and Additional Austerity Measures, which also considered extending measures that were due to expire on 13 June. The austerity measures were introduced following the closure of the Strait of Hormuz by Iran, subsequently international oil prices surged, driving up Pakistan's import bill and putting pressure on domestic fuel prices. (“Govt extends austerity measures until June 30, eases operating hours,” The Express Tribune, 10 June 2026)
Pakistan seeks LNG from spot market amid limited supplies
On 11 June, The Express Tribune reported that Pakistan is again seeking to buy LNG from the spot market to meet the demand from power producers. Earlier, the government rejected a bid to buy LNG from the spot market after it secured gas cargoes from Qatar. During the last tender, Pakistan LNG Limited rejected bids for two spot cargoes, which demanded higher rates and could force consumers to pay an additional USD 22 million for one cargo. Pakistan LNG Ltd has invited fresh bids for two cargoes scheduled for delivery in June 2026 at Port Qasim amid limited gas supplies from the Gulf Arab state of Qatar. According to the tender notice, cargoes are scheduled for delivery on 13-14 June and 20-21June. The company seeks cargoes of 140,000 cubic metres each, with a tolerance of plus or minus 10 per cent under the terms specified in the bid documents. Suppliers can obtain bid documents until 11 June 2026. Pakistan's local gas production is shrinking every year, and its reliance on imported gas is increasing. (“Pakistan rushes to spot market for LNG supplies,” The Express Tribune, 11 June 2026)
POLITICS & GOVERNANCE
Protesters block Karakoram Highway over “Gilgit-Baltistan” poll dispute
On 10 June, Dawn reported that protesters blocked the Karakoram Highway in Daimer and other areas for a third consecutive day over re-polling orders and delays in announcing official results in several “Gilgit-Baltistan”(GB) constituencies. Supporters of Pakistan Peoples Party (PPP) candidates staged sit-ins demanding the announcement of final results re-polling, accusing the “GB” Election Commission of withholding vote counts to manipulate outcomes. Meanwhile, the commission withdrew its earlier re-polling order for constituency Skardu-2 after a fact-finding report found no evidence of irregularities and declared Majis Wahdat-i-Muslimeen’s (MWM) candidate Kazim Mesum the winner. The commission separately ordered an inquiry into alleged irregularities in constituency Skardu-3. (“Protests block Karakoram Highway for third day over re-polling, delayed GB poll results," Dawn, 10 June 2026)
SECURITY
No survivors after Pakistan Army Mi-17 helicopter crashes near Muzaffarabad due to technical fault
On 10 June, Dawn reported that a Pakistan Army Aviation Mi-17 helicopter crashed near Muzaffarabad during take-off due to a technical fault, with ISPR confirming no survivors among all personnel on board. A board of inquiry has been ordered to determine the exact cause. Field Marshal Asim Munir, President Zardari, PM Shehbaz Sharif, and FM Ishaq Dar all expressed condolences to the bereaved families. The Mi-17, a Russian-made transport helicopter operated by Pakistan Army Aviation since the late 1990s, carries a crew of three and can accommodate up to 24 troops or four tonnes of cargo. The crash follows a similar incident in September 2025 in which five personnel died after an army helicopter crashed in Gilgit-Baltistan's Diamer district. ("No survivors as Pakistan Army Mi-17 helicopter crashes near Muzaffarabad: ISPR," Dawn, 10 June 2026)
Balochistan: Armed militants torch police station and demolish checkpost in coordinated attacks in Pishin and Qila Abdullah
On 10 June, The Express Tribune reported that more than 50 armed men on motorcycles carried out simultaneous attacks on Sultan Police Station in the Dinar area of Pishin district and the Gilo checkpost in Gulistan tehsil, Qila Abdullah district, in Balochistan. The attackers overpowered on-duty personnel, snatched weapons, seized official vehicles, set fire to the police station, checkpost, and adjacent residential quarters, and demolished the checkpost structure using an excavator before fleeing. Security forces launched a search operation and tightened monitoring at entry and exit points across both districts. No group has claimed responsibility. ("Police station set ablaze, checkpost demolished in coordinated Balochistan attacks," The Express Tribune, 10 June 2026)
Karak: Eight police personnel injured in militant ambush on joint search operation
On 10 June, Dawn reported that eight policemen were injured when militants attacked a joint police and Counter-Terrorism Department (CTD) team from a hilltop using sophisticated weapons during a search-and-strike operation in the Darga Saheedan area of Karak district, Khyber Pakhtunkhwa. A police vehicle was also damaged in the attack. DPO spokesperson Shaukat Khan said the injured were in stable condition and that several assailants were believed to have been killed in the exchange of fire. DPO Imran Khan led additional forces to the site, with a sanitisation operation launched to neutralise any remaining militants. Security has been tightened at entry and exit points across the district. ("8 policemen injured as terrorists ambush police team in KP's Karak," Dawn, 10 June 2026)
Pakistan strikes militant hideouts along Afghan border; kills 26 militants in response to recent attacks
On 10 June, Dawn reported that Pakistan carried out precision strikes on TTP hideouts and training facilities along the Pakistan-Afghanistan border, killing 26 militants, according to Information Minister Attaullah Tarar. Four targets were destroyed, including a training centre, a hideout, an ammunition cache, and militant centres belonging to TTP commanders Aleem Khan Khushali and Akhtar Muhammad Jani Khel. Tarar said the strikes were carried out in response to recent terrorist incidents, including a 09 June attack on an FC post in Musa Dara, Peshawar, in which six FC personnel were martyred and three abducted, a vehicle-borne suicide attack on a military post in North Waziristan on 02 June, and the 09 May Bannu suicide attack that killed 15 police personnel. Afghan Taliban spokesperson Zabihullah Mujahid alleged civilian casualties, a claim the Information Ministry's fact-checking account rejected as fabricated propaganda. China, which hosted Pakistan-Afghanistan talks in Urumqi in April, intends to hold a second meeting to keep the dialogue process on track, though the latest strikes mark a renewed escalation following a lull since the Urumqi meeting. ("Pakistan strikes terrorist hideouts along Afghan border, kills 26 militants: minister," Dawn, 10 June 2026)
PAKISTAN AND THE US-IRAN WAR
Pakistan urges the US and Iran to pursue peace amidst fresh hostilities
On 10 June, Dawn reported that Pakistan urged all sides to exercise restraint after the United States and Iran engaged in a fresh round of hostilities. Speaking at the United Nations Security Council (UNSC) session, Pakistan’s Permanent Representative to the UN, Asim Ifthikhar, said the recent surge in violence was a stark reminder og the dangers of a fragile ceasefire. He called on all parties to give diplomacy a chance, noting that Pakistan had been actively engaging with both Washington and Tehran, as well as partners including Saudi Arabia, Egypt, Turkiye, Qatar and China, to create conditions for meaningful negotiations. Ambassador Ahmad also expressed concern that the breakdown in diplomacy had further complicated the effort to resolve the Iranian nuclear issue. (“Pakistan urges US, Iran to 'give peace a little more chance' amid fresh round of hostilities,” Dawn, 10 June 2026)
Editorials/Opinions
US-Iran war
Editorial, "Peace in retreat," Dawn, 11 June 2026
"The ceasefire announced in April was supposed to create space for negotiations. Instead, it has been repeatedly tested by military confrontations. The latest and most serious exchange began with the downing of a US Apache helicopter near the Strait of Hormuz and escalated into American strikes on Iranian military targets and retaliatory Iranian attacks on US bases in Jordan, Kuwait and Bahrain. While both sides continue to speak of diplomacy, events are moving in the opposite direction."
https://www.dawn.com/news/2006803/peace-in-retreat
Imran Jan, "How US and Israel are the biggest losers of this war," The Express Tribune, 11 June 2026
"When the Soviet Union lost the Cold War, it was not like it became an occupied territory where the American occupiers handled Russian slaves. But rather the Soviet Union lost the global power status and communism lost the influence it was supposed to have around the world. Likewise, when the United States lost the war in Vietnam, America did not sign some document of surrender and it wasn't like Ho Chi Minh was marching in the streets of Hanoi dictating the terms of the American defeat."
https://tribune.com.pk/story/2612472/how-us-and-israel-are-the-biggest-losers-of-this-war
Provinces
Editorial, "Karachi's crime culture," The Express Tribune, 10 June 2026
"There is little debate left about Karachi's liveability as it plunges further into disorder every year, especially when compared with other big cities of Pakistan. But one question will always remain unanswered - do citizens get the government they deserve, or does the government instigate citizens into living anarchically? Regardless, it comes as no surprise that an inflation-ridden land with barely any social protection is, according to the Citizens Police Liaison Committee (CPLC), reporting an uptick in crime and a deteriorating law and order situation."
https://tribune.com.pk/story/2612288/karachis-crime-culture
Economy
Ishrat Husain, "Regulation and deregulation," Dawn, 11 June 2026
"Pakistan’s real challenge is not to choose between regulation and deregulation, but to regulate intelligently, promote competition and enforce rules impartially. Strong, independent and professionally managed regulators are essential for attracting investment, protecting consumers and ensuring affordable, reliable energy supplies. Only then can regulation become an instrument of economic efficiency, instead of remaining an obstacle to growth."
https://www.dawn.com/news/2006808/regulation-and-deregulation
Budget 2026-27
Editorial, "Centre vs provinces," Dawn, 10 June 2026
"Delays in budget announcements are normal. After all, it is not easy to satisfy different lobbies competing for a bigger share of the shrinking fiscal pie. But the current impasse is of a different order. It signifies a constitutional and political crisis that the government is struggling to contain. The immediate cause is clear, even if the government is reluctant to state it openly."
https://www.dawn.com/news/2006555/centre-vs-provinces
Society
Muhammad Hamid Zaman, "Reimagining healthcare for the displaced," The Express Tribune, 10 June 2026
"The idea that the system to protect and deliver quality healthcare to those displaced because of conflict or persecution remains broken is not particularly novel. It is self-evident now. Funding to support distressed communities has all but evaporated, and whatever fiction of international law we believed in, is no longer believable."
https://tribune.com.pk/story/2612322/reimagining-healthcare-for-the-displaced-1
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