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Today’s news: Globally, updates from Gaza, UK-EU talks, and Moody’s lowers the US’s rating. Locally, downgraded IMF growth forecast, rising IT exports, and Pakistan has dispatched a diplomatic team to counter Indian narratives abroad.

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Around The World

Update from Gaza. The Israeli military has issued orders for the forced evacuation of Khan Younis, Gaza’s second-largest city, as its offensive escalates. Israel launched an extensive ground operation in Gaza on Sunday in addition to an intense air campaign that killed over 100 people overnight and shuttered the last functioning hospital in the enclave’s north. 

Israel also carried out at least 30 air strikes within an hour in the area, killing at least 32 Palestinians since dawn. The military claimed it hit 160 targets in the past 24 hours and destroyed infrastructure used by Palestinian fighters in different parts of Gaza, including anti-tank rocket launcher sites and weapons depots. Live updates here.

The Israeli PM’s office says it will allow a limited amount of aid into Gaza, but it’s not clear when the supplies will enter the enclave. Netanyahu acknowledged on Monday that his decision to resume aid to Gaza came from pressure from allies. Israel has maintained that the blockade on goods, including fuel, food, and medicine, was meant to ramp up pressure on Hamas.

EU and I. The UK and the EU are expected to seal new deals today on fishing rights and defense in their first official summit since Brexit. There is hope that the agreements could improve the British economy, which has been hit by a drop in EU trade after the United Kingdom left the bloc in 2020. 

Concerns about Russia and China, the war in Ukraine, Trump no longer prioritising European defence, plus a growing sense of voter insecurity, are propelling the two powers to work closer together. Here’s all that might be discussed at the summit.

Moody swings. Credit rating agency Moody’s has downgraded America’s creditworthiness from a perfect AAA grade to the next-best Aa1, due to the US running up massive deficits and paying an eye-watering amount of interest to service its debt. Moody’s was the last of the three credit rating agencies to knock the US from the most pristine credit rating. The others, S&P and Fitch, downgraded the US’s credit in 2011 and 2023, respectively. Asian shares fell Monday, and US futures and the dollar weakened after the news.

Pakistan

Pakistonomy. The IMF has revised Pakistan’s GDP growth forecast for FY2024- 25 down to 2.6% from 3.2%, citing weak performance in the first half of the year and global uncertainty. Growth in Q1 and Q2 was limited due to poor crop yields and subdued industrial activity. Inflation fell to 0.7% year-on-year in March, but core inflation remains high around 9%, with a return to the 5–7% target range expected in FY2026. Current expenditure holds at 18.9% of GDP, while development spending is projected at 2.5% despite slow disbursements. Defense spending is set to rise to 1.9% of GDP, and privatization proceeds are projected at zero.

Additionally, the IMF has introduced 11 new structural benchmarks (SBs) for Pakistan under its ongoing $7 billion Extended Fund Facility (EFF), including key fiscal, governance, social, energy, monetary, and trade reforms. These include parliamentary approval of the FY2026 budget aligned with IMF targets, implementation of new agriculture income tax laws, adjustments to energy tariffs, and legislation for trade liberalization and financial sector reforms.

IT is what IT is. Minister of State for Information Technology and Telecom Shaza Fatima Khawaja reported that Pakistan's IT exports, including earnings from freelancers and IT companies, surpassed $3.5 billion during the July–April period of the current fiscal year. IT services alone contributed $3.14 billion. The IT sector also recorded a trade surplus of around $2.3 billion, the highest among all service sectors. 

Avengers, assemble! PPP Chairman Bilawal Bhutto-Zardari has been tasked with leading a high-level delegation to key international capitals to “present Pakistan’s position and counter Indian propaganda” by engaging with foreign governments, media, and institutions. The delegation includes senior political and diplomatic figures such as Musaddiq Malik, Khurram Dastgir Khan, Senator Sherry Rehman, Hina Rabbani Khar, Faisal Sabzwari, Tehmina Janjua, and Jalil Abbas Jilani.

What Else Is Happening?

🧗Renowned Pakistani climber Sirbaz Khan on Sunday successfully summited Mount Kangchenjunga (8,586 meters) and became the first Pakistani in history to complete all 14 of the world’s 8,000-metre peaks without any oxygen support.

🧑‍🎓 Google Cloud has launched a "first-of-its-kind" Generative AI Leader certification, which costs $99, focusing on strategic AI adoption beyond coding. Get certified!