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In Focus
US-Iran peace deal “now complete”, says PM Shehbaz
Trump and Iranian officials confirm peace agreement; Strait of Hormuz to be reopened, US naval blockade lifted
On 15 June, The Express Tribune and The News International reported that Prime Minister Shehbaz Sharif announced that the United States and Iran had reached a final peace agreement after intensive negotiations, with both sides declaring an immediate and permanent end to military operations, including in Lebanon. He said the official signing ceremony would take place in Switzerland on 19 June and thanked Qatar, Saudi Arabia and Türkiye for supporting mediation efforts. The agreement follows months of conflict and Pakistan’s diplomatic engagement aimed at securing a negotiated settlement.
US President Donald Trump confirmed that the agreement with Iran had been completed and announced the reopening of the Strait of Hormuz alongside the removal of the US naval blockade. Iranian officials also described the framework as close to completion, while mediation channels remained active to prepare technical discussions before formal signing. Despite concerns after Israeli strikes in Lebanon threatened talks, negotiators moved ahead, presenting the agreement as a potential step towards wider regional de-escalation. (“Trump announces completion of Iran deal, removes US blockade of Strait of Hormuz,” The Express Tribune, 14 June 2026; “Pakistan mediation pulls off elusive deal,” The Express Tribune, 14 June 2026; “US, Iran reach peace deal, official signing in Switzerland on Friday Shehbaz: Trump says deal with Iran ‘now complete’, announces removal of naval blockade,” The News International, 15 June 2026)
In Brief
ECONOMY
Government highlights financial risks to next year’s budget outlook
On 15 June, Dawn reported that the finance minister presented, in a written statement to parliament, financial risks across seven major categories, as required under the Public Finance Management Act 2019. The government has warned of key risks to next year’s budget outlook, such as global oil price hikes, sluggish GDP growth, revenue shortfalls, increased debt servicing costs, state-owned entities’ poor performance, and unforeseen natural disasters and climate impacts. The statement highlighted that rising international oil prices, specifically a USD 40 per barrel increase, are projected to add 0.8 per cent of GDP to the fiscal deficit in the 2026-2027 fiscal year. Revenue collection remains exposed to lower tax elasticity, an economic slowdown, shortfalls in non-tax receipts, and structural challenges in reducing the tax gap. If tax revenue grows 10 per cent lower than budget estimates, it could result in a reduction of 0.7 per cent of GDP. Similarly, a 20 per cent shortfall in petroleum levy collection could add 0.2 per cent to GDP. Also, a 200-basis-point rise in domestic interest rates and a 100-basis-point rise in external rates could increase interest payments, widening the deficit by 0.4 per cent of GDP. State-owned entities pose risks through lower dividend payments and higher government support. A six per cent shortfall in dividends is estimated to widen the deficit by 0.02 per cent of GDP. Furthermore, natural disasters remain one of the largest risks. Without dedicated disaster risk financing mechanisms, an average disaster event could increase the fiscal deficit to 1.5 per cent of GDP. (“Budget 2026-27: Multiple risks looms over next-year budget, finance ministry warns,” Dawn, 15 June 2026)
Budget allocates funds to build cold storage facilities; sidelines livestock sector
On 14 June, Dawn reported that agri-leaders say the PKR 4.18 billion research allocation in the budget lacks clarity and is insufficient for the agriculture sector. The senior vice president of Sindh Chamber of Agriculture said the finance minister had not given adequate attention to the agriculture sector in his budget speech. He suggested that the PKR 7.3 billion allocated for cold storage should instead be directed towards the livestock sector to promote milk processing, meat production, and exports. Also, members of the Hyderabad Chamber of Small Traders and Small Industries said the budget included some positive economic and tax reforms that should be welcomed. However, they added that more concrete measures were still required to address the problems of small traders and SMEs. (“Agriculture largely ignored,” Dawn, 14 June 2026)
Government projects higher remittances and current account deficit
On 13 June, Dawn reported that the government has increased the remittances target and projected a significantly higher current account deficit (CAD) for FY27. The government has set a USD 42.4 billion remittances target for FY27, compared with USD 41.3 billion for FY26. The government set a CAD of USD 3.6 billion for FY27, which would be around 0.7 per cent of GDP, compared to the revised deficit target of USD 1.1 billion, or 0.2 per cent, for FY26. The export target for FY27 is USD 32.9 billion, while the import target is set as USD 70 billion, showing a trade deficit of USD 37.1billion. This large trade deficit would certainly force the current account deficit to expand in FY27. (“Govt eyes $42.4 bn in remittances,” Dawn, 13 June 2026)
Monetary Policy Committee to finalise policy review of FY26
On 14 June, Dawn reported that the Monetary Policy Committee (MPC) is scheduled to meet on 15 June for the final policy review of FY26. Ahead of the State Bank of Pakistan’s (SBP) upcoming monetary policy announcement, the grounds for an increase in the policy rate have largely disappeared as global oil prices have either remained stable or eased. The MPC will also consider the current account and trade imbalance before making any decision on interest rates. The fiscal position and current account remain critical variables, particularly for an economy that has historically faced external financing constraints. Inflation remains a key determinant of monetary policy. Analysts expect average inflation in FY26 to remain around 7 per cent, while inflation in FY27 is projected to be slightly above 8 per cent. (“Policy rate hike unlikely in final FY 26 review,” Dawn, 14 June 2026)
Government increases budget for health sector, proposes projects for twin cities
On 14 June, Dawn reported that in the budget for the fiscal year 2026-27, the government has allocated PKR 53.3 billion for different health projects, including public sector development. Program (PSDP). Of the PKR 22 billion earmarked for the Ministry of National Health Services, PKR 20.7 billion will be financed through local resources, while PKR 1.3 billion will be received from foreign assistance. The health sector’s share in the overall social sector development budget stands at 2.2 per cent of the total PKR 187.2 billion social sector allocation for FY 2026-27. Among the key projects included in the budget is funding for cardiovascular research and disease prevention. The government has proposed Rs1.5 billion for a project at the National Institute of Heart Diseases (NIHD) Rawalpindi to support research and preventive measures. Rs1 billion has been earmarked for the expansion and upgradation of the Armed Forces Institute of Cardiology (AFIC) and NIHD. Meanwhile, the Pakistan Medical Association (PMA) has expressed concerns over the deteriorating state of national health security, declaring that a combination of misplaced budgetary priorities and rampant economic inflation had plunged the country into a full-blown public health emergency. Also, the Drug Control Section is severely constrained with an allocation of just PKR 144 million. (“Budget 2026-27: health allocations reach Rs 533bn new projects proposed for twin cities,” Dawn, 14 June 2026)
POLITICS & GOVERNANCE
PPP urges withdrawal of “AJK” election schedule as protests turn deadly in Rawalakot, killing two
On 15 June, Dawn reported that Pakistan Peoples' Party (PPP) Chairman Bilawal Bhutto-Zardari urged Joint Awami Action Committee (JAAC) protesters in "Azad Jammu and Kashmir" to end their demonstrations, warning that the unrest was damaging both the Kashmir cause and Pakistan's reputation at a moment when the international spotlight was on Pakistan's mediation of the US-Iran peace agreement. The appeal came after two people were killed and eight were injured in a clash between protesters and law enforcement near Eidgah Ground in Rawalakot. PPP "AJK" President Chaudhry Muhammad Yasin asked the Election Commission to withdraw the schedule for 27 July polls, noting that 37 of JAAC's 38 demands had been implemented, with only the constitutional matter of refugee seats outstanding. PML-N, through Parliamentary Affairs Minister Tariq Fazal Chaudhry, insisted elections proceed on schedule, stating the current assembly's term required polls before 04 August, though nomination deadlines could be extended. A shutter-down strike continued for a sixth day across "AJK", with mobile services suspended in Rawalakot and internet restrictions extended until 20 June. PPP leader Nayyar Hussain Bukhari said the party had sought postponement due to the law and order situation and the onset of Muharram, and also called for postponing "Gilgit-Baltistan's" local government elections. ("PPP links AJK election to peace in region," Dawn, 15 June 2026)
Budget debate opens with Achakzai-Shehbaz exchange over provincial funding freeze, border fencing
On 14 June, Dawn reported that the National Assembly opened its general debate on the FY2026-27 federal budget with lawmakers largely focused on political rather than budgetary matters. Opposition Leader Mehmood Khan Achakzai criticised the government's freeze on provincial development allocations, warning it would hit health and social sectors, and framed his remarks within a broader historical and political critique. PM Shehbaz Sharif responded directly on the floor, defending the government's record on Balochistan, citing the Reko Diq project, a doubled NFC share, solar panel distribution to farmers, and the Chaman-Gwadar road. On border fencing, which Achakzai had criticised, Shehbaz defended the 2,000-kilometre Pakistan-Afghanistan fence as a security necessity, saying it was money well spent if it saved even one life, and referenced the recent helicopter crash that killed 22 army personnel as well as the sacrifices of soldiers fighting terrorism in KP. He renewed his offer of talks and a charter of democracy with the opposition. PTI Chairman Barrister Gohar Ali Khan subsequently criticised the alleged role of the establishment in politics and demanded Imran Khan's rights be respected in prison, while MQM's Farooq Sattar called for the passage of the 28th Amendment to strengthen the local government system. ("Budget 2026-27: Govt slammed over provincial freeze as budget debate opens," Dawn, 14 June 2026)
Info Minister Tarar invites opposition to sign Charter of Economy as PTI, PPP slam FY27 budget proposals
On 14 June, Dawn reported that Information Minister Attaullah Tarar invited the opposition to sign a Charter of Economy and defended the FY27 federal budget as "friendly and relief-oriented," highlighting the proposed abolition of the super tax and increases in revenue and remittances. PTI's Asad Qaiser responded by offering a Charter of Democracy instead, focused on an independent election commission and judiciary, while rejecting claims that PTI had written anything against Pakistan to the IMF. Qaiser argued the budget proposals originated from the IMF, citing projected losses of PKR 2.2 trillion for Punjab farmers, a 390 per cent tax burden on tobacco growers in KP, PKR 434 billion in outstanding federal dues to KP against a new PKR 175 billion tax demand, and the continued closure of trade with Afghanistan. He also raised Imran Khan's lack of family jail visits. PTI's Amir Dogar called the budget "anti-people," citing PKR 4,365 billion in petroleum levy collected over three months and PKR 103 billion for new dams as inadequate, while renewing the demand for a South Punjab province. PPP's Sharmila Faruqui said the salaried class had paid PKR 550 billion in taxes against only PKR 50 billion in relief, criticised the government's poverty line threshold of PKR 8,484 per month, and noted only PKR 10 billion had been allocated toward the Sukkur-Hyderabad Motorway out of PKR 224 billion for the National Highways Authority. ("Info minister invites opposition to sign Charter of Economy, defends proposed FY27 budget," Dawn, 14 June 2026)
EXTERNAL
Foreign Minister Dar discusses US-Iran deal progress with Turkish and Egyptian counterparts
On 14 June, The Express Tribune reported on Deputy Prime Minister and Foreign Minister Ishaq Dar holding separate telephone calls with Turkish Foreign Minister Hakan Fidan and Egyptian Foreign Minister Badr Abdelatty to discuss regional developments and recent progress towards a US-Iran understanding. In both conversations, Dar welcomed the encouraging momentum and expressed hope that ongoing diplomatic efforts would pave the way for lasting peace and stability in the region. Dar had also separately spoken with Swiss Foreign Minister Ignazio Cassis and Saudi Foreign Minister Prince Faisal bin Farhan on the same day, with all sides agreeing to remain in close contact on further developments. (“Dar discusses regional developments with Turkish, Egyptian counterparts: MoFA,” The Express Tribune, 14 June 2026)
SECURITY
Bannu: Alleged militant commander, two others killed in separate incident
On June 13, Dawn reported that, according to the Police Peace Committee, a man named Shahid was killed near Kangar Bridge. He was alleged to be closely associated with militant commander Akhtar Muhammad. In another incident, the bodies of two individuals, later identified as Ghazi Marjan and Parvez, were found and recovered from Domel Link Road. It was reported that both men had allegedly been abducted and killed by militants. Militants targeted the Teri Ram Bridge and aimed to destroy it with explosives. According to locals, the explosion partially damaged the bridge and a nearby mosque. Bannu has faced security issues in recent months, with civilian, police, and terrorist casualties reported last month during a clash between authorities and militants, as well as 15 police personnel after a suicide attack. (“Alleged militant commander killed in Bannu; attempt to destroy link bridge foiled,” Dawn, 13 June 2026)
DG Khan: Suicide attack kills two police officers, injures at least six others
On 15 June, The Express Tribune reported that a suicide attack near the Punjab-Khyber Pakhtunkhwa border killed two police officials, injured at least six others and caused severe damage to the police checkpost. According to officials, TTP terrorists drove an explosives-rigged vehicle into the Jhungi Police Checkpost in a suicide attack. The two police officials who sustained severe injuries and later died were identified as Ghulam Abbas and Mudassar Jiskani. The 6 injured officers identified were Muhammad Hanif, Riaz, Naimat, Usama, Abdul Rehman, and Falak Sher, among other individuals. The explosion destroyed the police checkpost, and later, senior police officials arrived at the scene to collect evidence. Several locals were injured during the blast, including Muhammad Abrar, Hamidullah, Muhammad Hanif, Abdul Latif, and Muhammad Hali, among others. It was confirmed that the suicide bomber died in the explosion. (“Two cops martyred in DG Khan suicide attack,” The Express Tribune, 15 June 2026)
AF-PAK
Fifteen Afghan nationals detained in Chachro intelligence operation
On 15 June, The Express Tribune reported on a joint intelligence and law enforcement operation in Chachro tehsil of Tharparkar district, Sindh, during which 15 suspected Afghan nationals were detained. Authorities scrutinised residency records and identity documents of Afghan families living near Chachro police station, following which the suspects were taken into custody and shifted to Karachi for further investigation. Residents said most of the detained individuals had lived in the area for nearly two decades and were engaged in the furniture business. Investigators are also examining alleged irregularities in identity documents, including the use of fake addresses on national identity cards, as well as transactions involving government and residential land. (“15 Afghan nationals rounded up in Chachro operation,” The Express Tribune, 15 June 2026,)
Editorials/Opinions
US-Iran war
Editorial, “Brief Opening,” Dawn, 15 June 2026
“Throughout the weekend, there was great anticipation that a tentative framework for peace between the US and Iran was close. Prime Minister Shehbaz Sharif had tweeted on Saturday that a deal could be inked within “24 hours”, while US President Donald Trump had made similar comments. But as was witnessed yesterday, Israel played its traditional role as a spoiler by bombing the Beirut suburb of Dahiyeh — a Hezbollah stronghold. This has caused some consternation in the Iranian camp, as contrary to what some commentators were saying, Tehran was not ready to throw its Lebanese ally under the bus. The Iranians have for long been saying that Lebanon must be included in any peace deal with the US. Iran’s top negotiator Bagher Ghalibaf went as far as to claim that the US had greenlit the Beirut attack. In the meantime, efforts have been intensified by regional states, including Pakistan and Qatar, to save the deal, and prevent the negotiations from collapsing.”
https://www.dawn.com/news/2007954/brief-opening
Climate change
Editorial, “Climate choices,” Dawn, 15 June 2026
“Pakistan is out of reasons to treat climate change as tomorrow’s problem. The Economic Survey 2025-26 reports that the country recorded its second-warmest year in 65 years in 2025, immediately after experiencing its warmest year on record in 2024. Temperatures in Azad Kashmir, Gilgit-Baltistan and KP reached their highest annual levels in decades.”
https://www.dawn.com/news/2007955/climate-choices
Editorial, “Environmental disaster,” Dawn, 15 June 2026
“A recent news report in these pages carried a picture of a sea turtle lying half buried in oil-contaminated sand somewhere along Gwadar’s coastline. A stretch of about 20 km on Gwadar’s west coast is now covered by a thick layer of toxic residue from an ocean oil spill, with officials warning that it poses a severe threat to the marine environment. Efforts are underway to clean the beach, but the dead sea turtle is evidence of the harrowing damage likely being caused by the disaster under the water. The local fishing industry will suffer, experts warn, as the slick suffocates marine life and contaminates their catch. It is unclear what caused the spill, but local officials believe it could be tied to the conflict in the Gulf, where rival powers have targeted ships as they attempt to wrest control over the Strait of Hormuz.”
https://www.dawn.com/news/2007953/environmental-disaster
Economy
Saeed Ahmed, “The crisis of leadership,” Dawn, 15 June 2026
“The current IMF programme is scheduled to conclude in the latter half of 2027, yet, the debate about how effective it is has already begun. Many ask whether the IMF’s policy framework is responsible for sluggish growth, unemployment, poverty and inequality. But framing the issue in purely economic terms risks missing the deeper problem. Pakistan’s recurring economic crises are not simply the outcome of flawed technical policies or IMF conditionalities. They are symptoms of a far more fundamental challenge: a crisis of leadership that permeates the political and institutional landscape. It is institutional rot that runs deep. Unless addressed, Pakistan will continue to oscillate between temporary stabilisation and renewed economic distress.”
https://www.dawn.com/news/2007951/the-crisis-of-leadership
On India
Maleeha Lodhi, “A year on, stalemate persists,” Dawn, 15 June 2026
“A year after the May 2025 conflict, the India-Pakistan relationship remains volatile. Diplomacy is frozen. Neither side has sought to break the deadlock. A war of words erupts every so often. Last week, it was over the water dispute. Then it was on the Kashmir dispute at the UN. Bilateral relations are at one of the lowest points in their tortured history.”
https://www.dawn.com/news/2007952/a-year-on-stalemate-persists
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