Declining Inflation
Pakistan’s inflation rate has fallen to its lowest level since November 2015, with the Pakistan Bureau of Statistics reporting it declined to 2.4% in January on a year-on-year basis. The slowing pace aligns with expectations of the federal government and State Bank of Pakistan. However, the central bank has warned, it expects the rate to inch back up in coming months.
Judicial Diversity
Chief Justice of Pakistan Yahya Afridi has supported the transfer of three judges to the Islamabad High Court, saying it enhances the federal representation of the judiciary. He has further noted the transfers are in accordance with Article 200 of the Constitution. However, five judges of the IHC have opposed the measure, claiming it risks “imposing” a “transplanted” chief justice on the Islamabad High Court.
Taxing Agriculture
After Punjab and Khyber-Pakhtunkhwa, Sindh has also adopted a law imposing taxes on agricultural income. The legislation is a precondition of the International Monetary Fund (IMF) for the ongoing $7 billion Extended Fund Facility, with Sindh Chief Minister Murad Ali Shah lamenting it stems from the failure of the Federal Board of Revenue to properly collect taxes.
Evicting Afghans
The government has prepared a plan to shift registered Afghan refugees out of Islamabad and Rawalpindi prior to gradually repatriating them back to Afghanistan. The three-phase plan calls for Afghans with Citizens Cards to be shifted first, followed by those with Proof of Registration Cards. In the third phase, Afghans awaiting resettlement in third countries would be moved out by March 31.
Power Sharing
P.M. Shehbaz Sharif has assured the PPP he will work to resolve their concerns over a canals project for corporate farming and “power sharing” in Punjab. While the canals project is a federal concern, the PPP’s demands in Punjab appear increasingly murky, as Chief Minister Maryam Nawaz has expressed unwillingness to take input on postings and transfers.
PTI in Lahore
The Pakistan Tehreek-e-Insaf has approached the Lahore High Court for permission to hold a public rally at Minar-e-Pakistan on Feb. 8. Last month, the party had sought permission for the demonstration from the Lahore administration to mark the first anniversary of the “theft of its mandate” in the 2024 general elections. The party is also organizing a protest in Swabi on the same day to register its protest.
Letters from Prison
Former Prime Minister Imran Khan has penned a letter to Chief of Army Staff Gen. Asim Munir urging a ‘rethink’ of policies to reduce the “distance” between the public and the armed forces. According to Khan’s lawyer and sister, he has claimed that terrorism in the country will reduce if state agencies focus on their duties rather than trying to “crush” the PTI.
Export Surge
Pakistan’s exports have increased by 10% in the first seven months of the ongoing fiscal year, reaching $19.55 billion compared to $17.77 billion in the same period last year. At the same time, imports have risen 6.95%. Exports in January 2025 stood at $2.92 billion, a year-on-year increase of 4.59%, while imports surged 10% to $5.233 billion from $4.756 billion in January 2024.
Tax Matters
Finance Minister Muhammad Aurangzeb has said he will personally request CJP Yahya Afridi to expedite hearing of tax-related cases to reduce litigation between the FBR and taxpayers. Expressing optimism about the country’s economy, he has noted the reduction in the key policy rate, declining inflation, and rising foreign investments as positive indicators for the future.
Try, Try Again
The government is set for another attempt at privatizing PIA after a previous effort last year failed to attract the minimum bid. To attract better offers, the government has removed the requirement of 18% GST on the purchase of new aircraft and vowed to address liabilities pertaining to taxes and pensions. Recently, PIA regained access to profitable European routes, also helping its chances for a sale.