Pakistan sees growth above 4 percent, looks to raise more than $1 billion from privatization

[Pakistan Projects Fiscal Growth Above Four Percent, Targets $1 Billion from Private Selling]

Bangkok reported that Pakistan’s economy is projected to expand by more than four percent this fiscal year, even as rising oil prices present challenges. The government is pursuing the privatization of five to six state‑owned entities, potentially generating over one billion dollars in revenue, according to Finance Minister Muhammad Aurangzeb, who spoke to Reuters on Monday.

Pakistan’s economy faces significant vulnerability to any protracted Middle East conflict, given its reliance on imported Gulf energy, remittance inflows, and regional financial support, despite ongoing dependence on external financing to sustain foreign‑exchange reserves and serve debt obligations.

With a population of 255 million, Pakistan has secured adequate fuel supplies, thereby avoiding shortages, while key sectors—especially agriculture—remained resilient, as highlighted by Finance Minister Muhammad Aurangzeb.

“We aim to exceed 4 percent,” Minister Aurangzeb statement during his interview on the sidelines of the International Monetary Fund and World Bank summits in Bangkok.

“Inflation monitoring remains a priority, as rising prices translate directly into higher commodity costs,” the minister added.

After enduring deep economic turbulence aggravated by the COVID‑19 pandemic, the struggling economy has begun to regain momentum, bolstered by a $7 billion, 37‑month Extended Fund Facility approved in 2024 that incorporates strict revenue‑raising measures, notably increased taxes on agricultural income.

EXCHANGE STABILISATION FACILITY

Pakistan, which obtained a staff‑level IMF agreement last week that could unlock approximately $1.21 billion in funding under the Extended Fund Facility and a climate programme, is pursuing a $10 billion exchange‑stabilisation facility with the United States, according to Aurangzeb.

He declined to provide a specific timeframe for concluding the negotiations.

“If such a deal materializes, it would constitute significant relief, complementing ongoing talks with the U.S. Export‑Import Bank (EXIM) and the U.S. International Development Finance Corporation (DFC).”

“Even without this facility, it does not create any impediment to market access,” he emphasized.

PRIVATISATION PUSH

The government plans to privatize roughly another dozen firms this fiscal year, adding those already sold—such as Pakistan International Airlines—alongside state‑owned power distributors and airport operators.

Aprx five to six assets are slated for sale this year, collectively capable of generating more than $1 billion in proceeds.

Privatization serves as a crucial test of Pakistan’s reform credibility with the IMF, with earlier statements warning that failing to divest loss‑making state companies risks reinvigorating fiscal pressures.

Apriltedly, Aurangzeb underscored that the private sector must lead the nation’s transformation, and that his ministry will work to support initiatives that enhance the business ecosystem.

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