BANGKOK: Pakistan plans to push ahead with the privatisation of five to six state-owned entities during the current fiscal year, a move that could generate more than $1 billion, Finance Minister Muhammad Aurangzeb told Reuters on Monday.
Aurangzeb also expressed confidence that Pakistan’s economy would grow by more than 4 per cent this fiscal year, despite elevated oil prices and economic uncertainty caused by the conflict in the Middle East.
Pakistan remains vulnerable to a prolonged regional conflict because of its dependence on Gulf energy imports, remittances and financial support. The country also relies on external financing to strengthen its foreign exchange reserves and meet debt repayment obligations.
However, Aurangzeb said Pakistan had secured adequate fuel supplies and avoided shortages. He added that critical sectors, including agriculture, were holding up.
“So I’m still quite clear that we should clock north of 4pc,” he said in an interview on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank in Bangkok.
On inflation, the finance minister said the government was monitoring developments closely because rising commodity prices could have wider economic effects.
Government Targets More State-Owned Entities
Pakistan’s economy has regained some stability after a period of severe economic turmoil, which was exacerbated by the Covid-19 pandemic.
The recovery has been supported by a $7 billion, 37-month IMF loan programme under the Extended Fund Facility, signed in 2024. The programme includes demanding reforms, such as increasing tax revenue from agricultural income.
Following the privatisation of Pakistan International Airlines last year, the government has around a dozen more entities in its pipeline, Aurangzeb said.
These include state-owned power distribution companies and plans to outsource airport operations.
“I expect about five or six of these to go through during this fiscal year,” he said, adding that the transactions could generate more than $1 billion.
Privatisation remains an important test of Pakistan’s reform commitments under its IMF programme. Officials have warned that retaining loss-making state-owned enterprises could put further pressure on public finances.
“We are quite clear that we want the private sector to lead the country,” Aurangzeb said. “So our role is to help support, assist any way we can in terms of the ecosystem.”
Pakistan Continues Talks on Proposed $10 Billion Facility
The ongoing conflict involving the United States, Israel and Iran is also expected to shape discussions at the IMF and World Bank meetings. The conflict has contributed to inflationary pressures and economic hardship across the region.
Pakistan reached a staff-level agreement with the IMF last week, potentially unlocking around $1.21 billion in financing under the Extended Fund Facility and a climate programme.
Meanwhile, Islamabad is continuing discussions with the United States over a proposed $10 billion exchange stabilisation facility, Aurangzeb said.
He declined to provide a timeline for concluding negotiations.
“If it comes through, this will be a great help for us,” he said.
The proposed facility would be in addition to ongoing discussions with the Export-Import Bank of the United States and the US International Development Finance Corporation.
However, Aurangzeb stressed that Pakistan’s access to international markets would not be affected if the proposed arrangement failed to materialise.
“If it doesn’t come through, this does not, you know, create any problem for us in terms of access to market,” he said.
