Pakistan targets over $1 billion from privatisation as growth tops 4%

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Pakistan targets $1B privatisation

Highlights

Finance Minister Muhammad Aurangzeb projects Pakistan's GDP growth above 4% for the current fiscal year despite inflationary pressures from higher oil prices and regional tensions.
Pakistan aims to raise over $1 billion from privatising around a dozen state-owned entities, including power distribution companies, with five or six deals expected this fiscal year.
Pakistan continues talks with the US on a proposed $10 billion exchange stabilisation facility, while a recent IMF staff-level agreement could unlock $1.21 billion in additional financing.

Growth outlook and external financing talks

As reported by Business Recorder, citing Reuters, Finance Minister Muhammad Aurangzeb says Pakistan remains on track for growth above 4% this fiscal year even as higher oil prices and regional conflict keep pressure on inflation and external accounts.

Speaking on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok, Aurangzeb says the country has secured adequate fuel supplies and avoided shortages, while agriculture continues to hold up. He says inflation is being watched closely because higher energy costs are feeding into broader commodity prices.

Pakistan remains vulnerable to a prolonged Middle East conflict because of its reliance on Gulf energy imports, remittances and financing support. The economy has nevertheless regained some stability after a period of severe turmoil following the COVID-19 pandemic, helped by the $7 billion, 37-month IMF Extended Fund Facility signed in 2024.

Pakistan also continues discussions with the United States on a proposed $10 billion exchange stabilisation facility. Aurangzeb does not give a timeline for any conclusion, but says the facility would be a major support if agreed and would sit alongside ongoing talks with the Export-Import Bank of the United States and the U.S. International Development Finance Corporation.

The minister adds that even if the facility does not materialise, Pakistan does not face a problem in terms of access to market. His comments come after the country reached a staff-level agreement with the IMF last week that could unlock about $1.21 billion in financing under the Extended Fund Facility and a climate programme.

Privatisation plan tests reform credibility

The privatisation drive is emerging as a central part of Pakistan's economic strategy as the government seeks to shift a larger role to private capital and reduce pressure from loss-making public entities.

Aurangzeb says around a dozen entities are in the pipeline after the privatisation of Pakistan International Airlines last year. These include state-owned power distribution companies as well as the outsourcing of airport operations, with five or six transactions expected to go through during the current fiscal year.

He says those deals could raise more than $1 billion. The programme is also closely tied to Pakistan's reform standing with the IMF, as officials have previously warned that failure to offload underperforming state firms could renew strain on public finances.

Aurangzeb says the government wants the private sector to lead the country, with the state's role focused on supporting the broader business ecosystem. That approach signals that privatisation is not only a fiscal tool, but also a wider policy marker for investor confidence and structural reform.

Global growth resilience amid the Middle East energy shock was a key focus of our earlier coverage ahead of the IMF and World Bank meetings in Bangkok, noting that major economies were still expanding even with oil above $100 a barrel. We also highlighted how heavy AI-linked investment is supporting output, while persistent inflation, rising sovereign debt and higher borrowing costs are tightening the policy and financing backdrop—especially for more energy-import-dependent economies.

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