Karachi: The Directors of Dawood Lawrencepur Limited have released their report for the period ending June 30, 2026, detailing the company's operations amidst testing geopolitical and economic conditions. The report, dated August 28, 2026, highlights the company's core activities and the macroeconomic environment within which it operates.
The principal activity of Dawood Lawrencepur Limited is managing investments in its associated and subsidiary companies that focus on generating and selling electric power through renewable wind and solar energy. These operations supply energy to the national grid and commercial entities. Additionally, the company actively manages an investment portfolio in the local capital markets.
The first half of 2026 presented numerous challenges as geopolitical tensions escalated. Notably, border tensions between Pakistan and Afghanistan, which intensified from late February 2026, hampered cross-border trade despite China's mediation efforts. Moreover, a conflict involving Israel, the United States, and Iran, beginning February 28, disrupted global energy markets, leading to a spike in international oil prices. Brent crude oil prices peaked at $120.4 per barrel before settling at $85.4 by the end of June.
Despite these challenges, macroeconomic stability in Pakistan was supported by progress under the International Monetary Fund (IMF) program. On May 8, 2026, the IMF Executive Board completed reviews under the Extended Fund Facility and the Resilience and Sustainability Facility, releasing a combined tranche of approximately $1.3 billion. This brought total disbursements to around $4.5 billion. Pakistan further regained access to international capital markets, raising $750 million through a Eurobond in April and $250 million through its debut Panda Bond in May.
Inflation rose significantly during the period, with the Consumer Price Index (CPI) averaging 9.0% in the first half of 2026, a marked increase from 1.9% in the same period the previous year. The rise was driven by higher energy and transport costs due to the regional conflict. In response, the State Bank of Pakistan raised the policy rate by 100 basis points to 11.5% in April, maintaining it thereafter to mitigate inflationary pressures and external risks.
The external account showed resilience despite a 9% year-on-year increase in the trade deficit, reaching approximately $18 billion in the first half of 2026. Workers' remittance inflows rose by 6.8% to $21.8 billion, supported by inflows from the Middle East and Gulf region. Foreign exchange reserves held by the State Bank of Pakistan stood at approximately $17 billion at the end of June, with total liquid reserves exceeding $22 billion.
Industrial activity demonstrated significant strength compared to the previous year, with Large-Scale Manufacturing growing by 5.0% versus 0.5% in the first half of 2025. January and March saw particularly robust growth at 10.9% and 11.1%, respectively. However, momentum waned towards the end of the period, with contractions in May and June.
According to information available from the Pakistan Stock Exchange (PSX), the resilience in economic activity and industrial production continued despite an intense combination of regional conflict, elevated energy prices, and global commodity market volatility. Strong remittance inflows and higher foreign exchange reserves provided crucial support to Pakistan's external position.
Despite the supportive macroeconomic fundamentals, inflationary pressures surged, particularly in the second quarter, prompting a cautious monetary policy stance. Ongoing IMF engagement and reform progress, along with strengthening external buffers, offer a foundation for continued recovery. However, sustained recovery will hinge on regional de-escalation, stable energy prices, and continued fiscal and structural reforms.