In partnership with
Profit
KP CM DEMANDS RELEASE OF ‘CONSTITUTIONALLY GUARANTEED’ FUNDS, WARNS OF FISCAL CRISIS Tuesday, 27 January, 2026 | 7 Sha’ban, 1447
g
KP CM ACCUSES CENTRE OF WITHHOLDING CONSTITUTIONALLY GUARANTEED FUNDS
MERGED DISTRICTS HIT HARDEST DESPITE ALLOCATION OF RS292B, CLAIMS CM KP
K
g
g
g
PESHAWAR
SAYS SHORTFALL OF RS54.4B DISRUPTS BUDGET EXECUTION AND SERVICE DELIVERY
AFRIDI URGES PM FOR IMMEDIATE RELEASE OF OUTSTANDING NFC, ROYALTIES, AND HYDEL FUNDS
staff report
HYBER Pakhtunkhwa Chief Minister Sohail Afridi on Monday wrote to Prime Minister Shehbaz Sharif, accusing the federal government of a “persistent failure” to release constitutionally guaranteed funds and demanding the “full and unconditional” payment of all outstanding federal dues to the province. Since assuming office in October last year, Afridi has repeatedly alleged that the Centre has delayed the release of funds allocated for KP, particularly those meant for the merged districts under the National Finance Commission (NFC). In his letter, the chief minister said he was compelled to place on record the “deep and mounting concern” of the KP government over the continued withholding of federal transfers, warning that the situation had triggered an acute fiscal and governance crisis in the province. Afridi said the KP budget for fiscal year 2025-26 was framed strictly in line
with constitutional entitlements, including net hydel profit, oil and gas royalties, post-merger NFC shares and regular monthly NFC releases. “These were not discretionary assumptions but binding fiscal obligations,” he stressed, adding that actual releases had consistently fallen short of budgeted levels. Of particular concern, he said, was the withholding of routine monthly NFC transfers, a practice that “finds no sanction in the Constitution and strikes at the
Rs 20.00 | Vol XVI No 203 | 8 Pages | Karachi Edition
core of cooperative federalism”. According to the chief minister, KP was entitled to receive Rs658.4 billion under the NFC but had so far received only Rs604bn, resulting in a shortfall of Rs54.4bn. He said the gap had directly impaired cash management, disrupted budget execution and constrained service delivery in key sectors. Afridi said the impact was most severe in the merged districts, where development and stabilisation were
national priorities. Despite a provincial allocation of Rs292bn, federal releases stood at just Rs56bn, he said, undermining essential public services and weakening the objectives of the merger. He added that the fiscal strain came at a time when KP remained on the frontline of counter-terrorism operations and was also bearing extraordinary costs related to flood response, rehabilitation and the management of temporarily displaced persons. “These are national responsibilities, yet the financial burden continues to be borne disproportionately by the province,” he said. Calling for immediate corrective action, the KP CM urged the federal government to release all outstanding dues, including monthly NFC transfers, net hydel profit, oil and gas royalties and funds for the merged districts, in line with constitutional provisions. Any further delay, he warned, would compound fiscal stress and weaken governance capacity, urging the prime minister to take up the matter with “urgent and personal attention”.
PM for establishment of international standard gemstone centers to help boost exports ISLAMABAD
staff report
Final decision on Pakistan’s T20 World Cup participation to be taken later this week, says Naqvi ISLAMABAD
staff Correspondent
Interior Minister Mohsin Naqvi on Monday said he briefed Prime Minister Shehbaz Sharif on the “International Cricket Council (ICC) matter,” adding that a final decision on Pakistan’s participation in the T20 World Cup will be made either on Friday or next Monday. According to a handout from the Prime Minister’s Office (PMO), Naqvi met the premier in Islamabad earlier in the day. “During the meeting, he briefed the prime minister on the recent situation regarding the ICC T20 World Cup and the Bangladesh Cricket Board (BCB),” the handout said. Naqvi, who also serves as chairman of the Pakistan Cricket Board (PCB), described the meeting as “productive,” adding that the prime minister had directed all options to be kept on the table while resolving the matter. The announcement comes after the ICC replaced Bangladesh with Scotland for the upcoming T20 World Cup, scheduled to begin on February 7, following Bangladesh’s refusal to tour India over security concerns amid strained political relations between the two countries. Bangladesh’s request to shift their matches to co-host Sri Lanka was rejected by the ICC, citing logistical constraints so close to the tournament. Earlier, Naqvi had criticized the decision, calling it unfair to Bangladesh and stressing that Pakistan’s participation was still undecided pending the prime minister’s guidance.
Prime Minister Muhammad Shehbaz Sharif on Monday directed the authorities concerned to utilize the full potential of Pakistan’s gemstone reserves to earn valuable foreign exchange through enhanced exports and set a deadline of August 2027 for the completion of the Islamabad Gemstone Center. Chairing a high-level meeting at the Prime Minister’s House here to review the promotion of the gemstone and minerals sector, the prime minister ordered the engagement of internationally renowned experts for the construction of proposed Gemstone Centers in Islamabad, Gilgit-
Baltistan (GB), and Azad Jammu and Kashmir (AJK), a Prime Minister’s Office news release said. Prime Minister Shehbaz Sharif emphasized that the implementation of the policy framework must be ensured with the assistance of global experts. “Value addition in the gemstone industry is the key to increasing our national exports,” the PM remarked, further directing that these centers be equipped with state-of-the-art technology and modern machinery. During the briefing, it was revealed that a site on Constitution Avenue in Islamabad has already been identified for the center. The facility will offer internationalstandard value addition services, certification, an incubation center,
and a trade center. To facilitate exporters, offices of the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) will also be established within the premises. The meeting was informed that four consultative sessions have been held with stakeholders regarding the newly approved Gemstone Policy. Furthermore, work on a scientific roadmap for geo-fencing gemstone deposits has commenced. The prime minister stressed the need for close collaboration between the federal government and the provincial governments, as well as the administrations of GB and AJK. The meeting was attended by Minister of State for Finance and Railways Bilal Azhar Kayani, SAPM Haroon Akhtar, and senior government officials.
Pakistan, Myanmar agree to expand cooperation across key sectors ISLAMABAD
staff report
Pakistan and Myanmar on Monday agreed to expand cooperation in a range of sectors, including religious tourism, people-to-people and cultural exchanges, trade, economy and science, with the aim of promoting shared prosperity. The commitment was expressed during a joint press stakeout by Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar and Myanmar’s Minister of Foreign Affairs Than Swe after delegation-level talks in Islamabad on Monday. Speaking on the occasion,
Ishaq Dar said the discussions were productive and comprehensive, stressing the importance of moving towards sustained, structured and results-oriented initiatives, particularly in the area of capacity building. He said the visit of Myanmar’s foreign minister reflected the importance both countries attach to revitalising and strengthening Pakistan–Myanmar relations. He underlined the need for resolving all contentious issues through dialogue and diplomacy and emphasised the importance of further deepening cooperation in academic linkages. The deputy prime minister
said Pakistan and Myanmar enjoy cordial and friendly relations, adding that Pakistan highly values the partnership and is keen to enhance cooperation across a wide range of mutually beneficial areas. In his remarks, Myanmar’s foreign minister thanked the government of Pakistan for the warm hospitality extended during his visit to Islamabad. Earlier, the two sides reviewed the full spectrum of bilateral relations and exchanged views on regional and international peace and security. They also agreed to remain in close contact on matters of mutual interest.
TTAP decries jailing of Imaan Mazari, Hadi Chatta as ‘dictatorship’, demands verdict reversal ISLAMABAD
staff Correspondent
The Tehreek Tahafuz Ayeen-i-Pakistan (TTAP) on Monday strongly condemned the prison sentences handed to lawyers Imaan Zainab Mazari-Hazir and her spouse Hadi Ali Chatta, declaring that “dictatorship has been imposed in Pakistan.” The condemnation came as a TTAP delegation visited Imaan’s mother, former federal minister Shireen Mazari, to express solidarity with the jailed couple. A post shared by the alliance on X showed TTAP chief Mahmood Khan Achakzai, Vice Chairman Mustafa Nawaz Khokar and PTI Chairman Barrister Gohar Ali Khan among those present. Speaking to reporters after the meeting, Gohar Ali Khan denounced the arrests, trial and convictions, alleging grave violations of due process. “We have always opposed the Prevention of Electronic Crimes Act (PECA). Voices cannot be suppressed, and nations cannot be silenced by suppressing voices,” he said. Gohar said the family had informed the delegation that they had no contact with Imaan, drawing parallels with PTI founder Imran Khan’s situation, who, he claimed, was also being denied meetings with family members. He warned that such verdicts foster lawlessness and encourage vigilante justice. “We condemn this judgment and demand that their cases be fixed for hearing, their convictions overturned and their sentences suspended,” Gohar said, adding that he hoped the chief justice of Pakistan would take notice of the case and other matters involving restrictions on speech and violations of fundamental rights. TTAP Vice Chairman Mustafa Nawaz Khokar said the alliance condemned the arrest of Imaan and Hadi and the denial of their constitutional rights, including the right to a fair trial and freedom of expression. “Without mincing words, dictatorship has been imposed in Pakistan,” he asserted. Rejecting claims that Pakistan was functioning as a democracy or a hybrid system, Khokar said recent court decisions were pushing the country towards models such as North Korea or Egypt. He warned, however, that Pakistan’s history was defined by resistance and struggles for democratic rights, noting that dictators had eventually been defeated. Khokar said the post-February 8, 2024 election order had exposed the absence of space for dissent. “Anyone who raises their voice or demands their rights is silenced. This situation is unacceptable,” he said, announcing that the TTAP alliance would stage a protest on February 8. He also expressed hope that people within the system and judiciary who still had a “conscience” would resist such actions, warning that they harmed not just individuals but the country as a whole. Responding to a question, Gohar said PTI had not withdrawn its call for protests on February 8 and had received no request from the government to do so. “Only Imran Khan can withdraw his own call,” he said, urging supporters to observe a wheel-jam strike and close shops in protest. On Saturday, Imaan Mazari and Hadi Chatta were sentenced to a combined 17 years in prison on multiple charges related to social media posts, triggering widespread outrage among rights groups and opposition parties. According to the written order by Additional District and Sessions Judge Muhammad Afzal Majoka, the prosecution proved its case under Sections 9 (glorification of an offence), 10 (cyberterrorism) and 26-A (false and fake information) of Peca. Both were sentenced to five years’ rigorous imprisonment and fined Rs5 million each under Section 9, 10 years’ rigorous imprisonment and Rs30 million fines under Section 10. , and two years’ rigorous imprisonment with Rs1 million fines under Section 26-A, along with additional jail terms in case of non-payment.
SBP holds policy rate at 10.5% but loosens liquidity through CRR PROFIT REPORT
Pakistan’s Monetary Policy Committee (MPC) on Monday kept the policy rate unchanged at 10.5%, defying market expectations that a further cut would take borrowing costs closer to single digits. The decision lands in an economy that looks calmer and firmer compared to the previous quarters. Moreover, the external account has seen more diversification in the last 2 months. Headline inflation has eased to 5.6% year-on-year in December 2025, inside SBP’s medium-term target band of 5–7%, but core inflation has steadied around a higher 7.4% in recent months. At the same time, SBP says domestic-oriented sectors are driving a faster-than-expected pickup in momentum, even as import volumes rise and exports weaken, widening the trade deficit. For markets, the surprise is not that SBP sees risks; it is that the central bank has cho-
sen to pause just one month after a surprise 50 basis-point cut in December, at a time when many participants were leaning toward continued easing. Earlier, reuters reported a poll expectation of a 50 basis-point cut ahead of the meeting, and noted cumulative easing of 1,150 basis points since mid-2024, making Monday’s hold a clear signal that the MPC wants more evidence before it risks reigniting inflation expectations. Why hold when headline inflation is back in range? SBP’s core argument is that the inflation and external outlooks are broadly unchanged from the last assessment, but the growth outlook has improved enough to justify caution. In its statement, the MPC frames the real policy rate as “adequately positive” for stabilising inflation within the 5–7% band over the medium term, and explicitly points to the need for a coordinated monetary-fis-
cal mix and productivity-enhancing reforms to lift exports and sustain growth. This means that the MPC wants to make sure that the current bout of reduced inflation is here to stay and is hopeful that any government expenditures or policies, that can directly impact the inflation levels, is made while keeping that in mind. This combination matters because a positive real rate gives the MPC room to avoid chasing short-term moves in headline CPI, particularly when it expects near-term volatility. The SBP projects inflation to stabilise within target in FY26 and FY27. An important thing that the SBP notes is that inflation may temporarily exceed the upper bound for a few months during the current calendar year, with risks tied to global commodity prices, domestic wheat prices, administrative energy adjustments, and stronger-than-assumed demand. SBP is not just looking at the “headline” number. It is watching core inflation, and
because that remains stuck around 7%, it is holding back from cutting rates. Growth is accelerating faster than SBP expected; Is that good? The statement’s real-sector section is a more detailed justification for the patience. As previously reported, provisional real GDP growth is reported at 3.7% year-onyear in Q1-FY26, up from 1.6% in the same period last year, led mainly by industry and agriculture. SBP argues that the momentum continues into Q2 on the basis of multiple high-frequency indicators, including auto sales, cement dispatches, POL sales excluding furnace oil, fertiliser offtake, and machinery and intermediate goods imports. This does not necessarily indicate improvement but rather a momentary spike due to various factors like calendar year end or production cycles. Large-scale manufacturing is the centrepiece, and the SBP cites LSM growth of 8.0% in October and 10.4% in November,
lifting cumulative LSM growth to 6.0% during July–November FY26. On that basis, the central bank upgrades FY26 growth projections to a 3.75–4.75% range, and signals that momentum may strengthen further in FY27 as earlier rate cuts continue to transmit through the economy. In practice, that upgrade is more complicated, when looked at with the pretext of near-term easing. A central bank cutting into an accelerating cycle takes on the burden of proving that demand expansion will not translate into renewed inflation, particularly when imports are already rising. This brings us to the external account position of Pakistan. External account; widening trade gap and contained deficits SBP’s external-sector narrative is also a balancing act. The current account posted a $244 million deficit in December 2025, taking the H1-FY26 cumulative deficit to $1.2 billion. The driver is the trade account.