United States Swims in Natural Gas While Global Markets Gasp for Supply

The Capital Development Authority (CDA) has accelerated plans to construct a new six-lane carriageway along Service Road East, approving a project worth Rs5.072 billion aimed at easing chronic traffic congestion on the Islamabad Expressway and improving connectivity between Faizabad and Koral Chowk. The 9.25-kilometre road will run parallel to the Islamabad Expressway, extending from Faizabad to Koral Chowk near Gulberg Housing Society. Once completed, the new corridor is expected to provide motorists with an alternative route, reducing travel time on one of the capital’s busiest transport arteries while facilitating smoother traffic movement for commuters travelling to Islamabad and Rawalpindi. Officials said the project forms part of the CDA’s broader strategy to upgrade the capital’s road infrastructure in response to increasing traffic volumes and rapid urban expansion in surrounding residential and commercial areas. According to official sources, the new carriageway is expected to improve access to several housing societies and neighbourhoods located along the eastern side of the Islamabad Expressway. Authorities believe the project will not only ease traffic bottlenecks but also stimulate commercial development by increasing the value of properties and attracting new businesses along the corridor. To facilitate construction, the CDA has earmarked approximately Rs500 million for the relocation of critical utility infrastructure. This includes fibre-optic networks operated by the Islamabad Police Safe City Project, the Strategic Plans Division (SPD), Sui Northern Gas Pipelines Limited (SNGPL), and the Islamabad Electric Supply Company (IESCO). Sources said extensive utility shifting will be required before the main construction work can proceed at full pace. The project involves relocating 11kV electricity distribution lines, shifting 242 electricity poles, and relocating 248 graves that fall within the road alignment. Earthwork activities have already begun at selected locations. The road project also incorporates environmental protection measures. Officials said engineers have planned the preservation of 22 underground water channels, natural streams, and stormwater drains located along the proposed route to minimise environmental disruption and maintain the area’s natural drainage system. A breakdown of utility relocation costs shows that around Rs406 million has been allocated for IESCO infrastructure, Rs87.3 million for shifting Safe City fibre-optic networks, and approximately Rs6 million for relocating SPD facilities. Work on these utility relocation components is expected to commence after the completion of technical and administrative formalities. A senior CDA official said the authority has revised the project’s completion timeline, reducing the original target of 12 months to between six and eight months. However, the official acknowledged that the timely relocation of utilities remains the biggest hurdle and will largely determine whether the revised deadline can be achieved.

ISLAMABAD: Pakistan’s trade deficit expanded sharply during the first month of the new fiscal year, reaching nearly $4 billion in July, as a strong rise in imports continued to outpace export growth, highlighting persistent weaknesses in the country’s external sector despite a series of incentives announced for exporters. According to the latest figures released by the Pakistan Bureau of Statistics (PBS), the country’s trade deficit widened to $3.95 billion in July 2026, compared to $3.16 billion recorded during the same month last year. The deficit increased by approximately $794 million, representing an annual rise of 25.2%. The widening gap was primarily driven by a substantial increase in imports, which climbed to $6.9 billion from $5.8 billion in July 2025. This reflects an increase of more than $1 billion, or 18% year-on-year, indicating stronger demand for imported goods and raw materials. Exports Show Growth but Remain Below Key Milestone While Pakistan’s exports registered positive growth, they once again failed to cross the important $3 billion monthly mark. Exports reached $2.94 billion, falling short of the milestone by around $61 million. On an annual basis, exports increased by 9.5%, adding nearly $256 million compared to July last year. Although the improvement reflects steady recovery in overseas shipments, analysts believe the pace remains insufficient to counter the rapid expansion in imports. Exports had crossed the $3 billion threshold in January 2026, touching approximately $3.05 billion, but the country has been unable to maintain that level in the months that followed. Tariff Reforms Under Scrutiny The latest trade figures have renewed debate over Pakistan’s tariff liberalisation policy, introduced under broader economic reforms supported by international financial institutions, including the World Bank and the International Monetary Fund (IMF). The government has gradually lowered tariff barriers to increase competition and integrate Pakistan more closely into global markets. However, economists argue that the economy was opened before domestic industries were provided with sufficient support to compete effectively. Business leaders have repeatedly pointed out that exporters continue to face high energy prices, elevated financing costs, tax-related uncertainties and exchange rate volatility, all of which reduce their competitiveness in international markets. Earlier projections by the World Bank had suggested that tariff reforms would increase exports by 14% while limiting import growth to around 7%. However, the latest figures suggest imports have grown much faster than anticipated, while export gains have remained comparatively modest. Government Rolls Out Fresh Export Incentives To strengthen export performance, the federal government has announced a series of financial support measures during the current fiscal year. In the federal budget, Prime Minister Shehbaz Sharif reduced the minimum and advance tax on exporters to 1.25% and abolished the 10% super tax on export earnings in an effort to improve liquidity and encourage investment in export-oriented industries. More recently, the government approved a Rs98 billion export support package aimed at improving competitiveness and increasing foreign exchange earnings. Under the revised Export Finance Scheme (E-EFS), exporters will be able to obtain six-month working capital loans at an interest rate of 8.5%, with the government absorbing 5 percentage points of the financing cost. The subsidy for this component alone is estimated at Rs58 billion during the current fiscal year. ECC Approves New Financing Facilities The Economic Coordination Committee (ECC) has also expanded access to concessional financing by increasing the ceiling of the existing short-term financing portfolio from Rs1 trillion to Rs1.5 trillion. In addition, the committee approved the launch of a new Long-Term Growth Financing Facility, allowing exporters to access loans at an interest rate of 2% for the first two years, followed by a fixed 5% rate for the subsequent eight years. The government has also introduced a performance-based rebate scheme, effective from July 1, 2026, with an estimated annual allocation of Rs15 billion. Under the programme, exporters recording annual export growth of up to 10% over the previous year will receive a rebate equal to 1% of the incremental export value, while exporters achieving growth exceeding 10% will qualify for a 2% rebate on additional exports. Long-Term Challenges Persist Despite successive incentive packages introduced over several decades, Pakistan continues to struggle with achieving sustained export-led growth. Industry observers note that no single Pakistani exporter has generated $1 billion in annual export earnings, underscoring the structural challenges facing the country’s export sector. These challenges include limited product diversification, low industrial productivity, rising production costs, inconsistent policy implementation and insufficient value addition. Monthly Performance Offers Some Relief On a month-on-month basis, the trade data presented a more encouraging picture. Exports increased by 31% in July compared to June, rising by approximately $697 million, while imports remained largely unchanged at around $6.9 billion. As a result, the monthly trade deficit narrowed by nearly 15%, or around $709 million, compared with the previous month.