Pakistan expects its economy to grow by more than 4% during the current fiscal year, while the government plans to advance the privatisation of five to six state-owned entities that could generate more than $1 billion, Finance Minister Muhammad Aurangzeb has said. Speaking to Reuters on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank in Bangkok on October 12, Aurangzeb said the growth target remained achievable despite elevated oil prices and pressure on commodity costs. The government is also continuing discussions with the United States over a proposed $10 billion exchange stabilisation facility as it works to strengthen external financing options and support economic stability.
Pakistan remains exposed to changes in global energy prices and regional economic conditions because it relies on Gulf countries for a substantial share of its energy imports, remittances and financing support. A prolonged conflict in the Middle East could place additional pressure on fuel costs, inflation and foreign exchange requirements. Aurangzeb said Pakistan had secured adequate fuel supplies and avoided shortages, while important sectors such as agriculture continued to show resilience. He also said the government was closely monitoring inflation because higher commodity prices could affect the broader economy and household purchasing power.
The country’s economic recovery follows a period of severe pressure that was intensified by the COVID-19 pandemic and subsequent financial challenges. Pakistan has received support through a $7 billion, 37-month IMF Extended Fund Facility signed in 2024. The programme includes measures intended to improve fiscal management and increase revenue collection, including taxation of agricultural income. Last week, Pakistan reached a staff-level agreement with the IMF that could unlock approximately $1.21 billion in financing under the Extended Fund Facility and a climate-related programme, subject to the required approval process. Continued engagement with the IMF remains an important part of the government’s efforts to maintain external stability and meet its financial obligations.
Aurangzeb said Pakistan was also holding discussions with the United States regarding a proposed $10 billion exchange stabilisation facility, although he did not provide a timeline for concluding the negotiations. If secured, the facility could provide additional support for Pakistan’s external financing position. The finance minister said its availability would be helpful, but added that failure to reach an agreement would not create a problem for Pakistan’s access to international markets. Separate discussions are continuing with the Export-Import Bank of the United States and the US International Development Finance Corporation, indicating that the government is pursuing several channels for potential financial cooperation.
Privatisation remains another major component of the government’s economic agenda. Following the privatisation of Pakistan International Airlines last year, the government has around a dozen additional entities in its pipeline, including state-owned power distribution companies and plans to outsource airport operations. Aurangzeb said he expected five or six of these transactions to proceed during the current fiscal year, potentially generating more than $1 billion. The final proceeds will depend on the entities involved, the structure of each transaction, investor participation and the completion of the relevant processes.
The government has presented greater private-sector participation as a way to change the management and financing of state-owned businesses. Some public-sector entities have faced financial losses that place pressure on government resources, making their restructuring or transfer to private operators an important part of broader fiscal reform discussions. Privatisation proceeds could provide a source of revenue, while changes in ownership or operations may alter how individual businesses are financed and managed. However, the impact on public finances will depend on the terms of each transaction, the financial condition of the entities and the extent to which the process reduces future government liabilities.
Aurangzeb said the government wanted the private sector to take a leading role in the economy, with the state supporting the business environment and helping create conditions for investment. The planned privatisation programme is therefore linked to a wider effort to encourage commercial activity and reduce reliance on government management of selected enterprises. Progress on the pipeline will be closely tied to the government’s ability to prepare entities for sale or outsourcing, attract suitable investors and complete transactions within the fiscal year.
Pakistan’s growth outlook will also depend on how effectively it manages inflation, energy costs, external financing needs and domestic economic activity. Higher oil prices can increase import expenditure and place pressure on prices, while disruptions to remittances or regional financing could affect foreign exchange inflows. At the same time, adequate fuel availability and resilience in agriculture may help limit some of the immediate risks to production. The government’s stated growth expectation of more than 4% reflects its current outlook, rather than a confirmed final result for the fiscal year.
The proposed US exchange stabilisation facility, continued IMF engagement and planned privatisation transactions represent separate elements of Pakistan’s efforts to support economic stability and reform. The facility remains under discussion, while the expected privatisation proceeds depend on the completion of transactions involving five to six entities. As the fiscal year progresses, the outcome of these initiatives, alongside inflation trends and economic activity, will help determine whether Pakistan meets its growth expectations and secures the additional financing and revenue targeted by the government.
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