In a significant address at the Pakistan Banking Summit 2025 in Karachi, Finance Minister Muhammad Aurangzeb highlighted the urgent need for structural reforms in state-owned enterprises (SOEs) to curb their escalating financial losses. Aurangzeb pointed out that SOEs are currently incurring losses amounting to Rs1 trillion annually, an unsustainable situation that requires immediate action to avoid further financial strain on the economy. The minister stressed that privatization of these entities is critical to ensuring economic stability and addressing long-standing inefficiencies within the sector.
Aurangzeb’s comments at the summit came amidst growing concerns over the financial health of the country’s SOEs, which have become a major drain on public resources. The minister emphasized that privatization, along with other reform measures, is essential for reducing these losses and improving the overall performance of these enterprises. The Finance Minister’s call for reform echoes ongoing discussions within the government about how to streamline SOEs, enhance their profitability, and reduce their reliance on state subsidies.
In addition to discussing SOE reform, the Finance Minister also provided an update on Pakistan’s ongoing engagements with the International Monetary Fund (IMF). Aurangzeb confirmed that a technical mission from the IMF is currently in Pakistan to deliberate on the establishment of a Climate Resiliency Fund, which aims to address the challenges posed by climate change. This mission is expected to remain in the country for three to four days, after which further talks will continue.
Moreover, Aurangzeb mentioned that a separate IMF team is scheduled to visit Pakistan in early March for the six-monthly review of Pakistan’s performance under the Extended Fund Facility (EFF). This review will involve key stakeholders, including the Ministry of Finance, the State Bank of Pakistan, and other relevant authorities. The EFF, which is part of Pakistan’s broader financial arrangements with the IMF, plays a crucial role in supporting the country’s fiscal stabilization and reform programs.
On the subject of economic growth, the Finance Minister reiterated the government’s focus on sustainable and inclusive development. He highlighted the importance of expanding Pakistan’s export base beyond traditional sectors such as textiles, IT, and agriculture. Aurangzeb pointed out that while these sectors remain important, the future of Pakistan’s export growth lies in diversifying into new areas such as minerals, which he believes could play a major role in the country’s economic growth by 2028. He called for a concerted effort across all sectors to increase exports and drive economic development.
When questioned about the emerging issue of cryptocurrency regulations, the Finance Minister clarified that this matter falls under the jurisdiction of the State Bank of Pakistan (SBP). However, he stressed the importance of approaching cryptocurrency with an open and adaptable mindset, given its growing significance in the global financial landscape.
Aurangzeb also touched upon the issue of taxation, drawing attention to disparities in revenue contributions across different sectors. He explained that certain sectors account for nearly 20% of Pakistan’s GDP but contribute only 1% to the country’s tax revenues. This, he argued, is a clear sign of inefficiency and unsustainability in the current tax system. The Finance Minister emphasized the government’s efforts to broaden the tax base, ensure compliance, and tackle revenue leakages to ease the burden on sectors that are already overtaxed.
Overall, the Finance Minister’s address underscored the government’s commitment to implementing comprehensive economic reforms. By focusing on privatizing state-owned enterprises, promoting export diversification, and improving tax collection, Aurangzeb laid out a roadmap for sustainable economic growth in Pakistan, despite the challenges posed by both domestic and global financial pressures.