Finance Minister Muhammad Aurangzeb says Pakistan’s economy is on track to grow by more than 4% this fiscal year, even as the government pushes ahead with plans to privatise several state-owned entities and raise over $1 billion in the process. Here’s what he told Reuters.
The Growth Outlook
Speaking to Reuters on Monday on the sidelines of the IMF and World Bank annual meetings in Bangkok, Aurangzeb said he still expects Pakistan’s economy to grow above 4% this fiscal year, despite elevated oil prices. “So I’m still quite clear that we should clock north of 4%,” he said. He added that the government is watching inflation closely, given its effect on commodity prices.
Privatisation: Five or Six Entities This Year
Aurangzeb said the government expects to privatise five or six state-owned entities during this fiscal year, raising more than $1 billion in the process. “I expect about five or six of these to go through during this fiscal year,” he said. Around a dozen entities are currently in the privatisation pipeline altogether, including state-owned power distribution companies and the outsourcing of airport operations. The specific entities expected to close this year weren’t named.
This push follows last year’s privatisation of flag carrier PIA, and privatisation more broadly is seen as a key test of Pakistan’s reform credibility with the IMF.
Where This Fits With the IMF
Pakistan reached a staff-level agreement with the IMF the previous week, potentially unlocking about $1.21 billion under the existing Extended Fund Facility along with a related climate program. The $7 billion, 37-month EFF was originally signed in 2024.
Risks on the Horizon
Aurangzeb acknowledged Pakistan’s economy remains highly exposed to a prolonged Middle East conflict, given its reliance on Gulf energy imports, remittances from the region, and related financing. The ongoing US-Israeli-led conflict with Iran, now in its eighth month, is expected to dominate discussions at this year’s IMF-World Bank meetings — notably being held outside Washington for the first time in three years. Despite the regional tension, Aurangzeb said fuel supplies have been secured without shortages, and the agriculture sector is holding up.
Talks With the US on Additional Financing
Separately, Aurangzeb confirmed that talks are continuing on a proposed $10 billion US exchange stabilisation facility, though he gave no timeframe for when these might conclude. “If it comes through, this will be a great help for us,” he said. Pakistan is also in separate discussions with the US Export-Import Bank (EXIM) and the US International Development Finance Corporation (DFC). He added that if the stabilisation facility doesn’t materialise, it wouldn’t create a problem for Pakistan’s market access.
Frequently Asked Questions
What growth rate is Pakistan targeting this fiscal year?
Finance Minister Aurangzeb says he expects the economy to grow above 4%, despite elevated oil prices.
Which companies will be privatised this year?
The exact five or six entities expected to be privatised this fiscal year weren’t named, though the broader pipeline of about a dozen entities includes power distribution companies and airport operations.
How much money does the government expect to raise from privatisation?
More than $1 billion from the five or six entities expected to be privatised this fiscal year.
Is Pakistan getting more IMF funding?
Pakistan reached a staff-level agreement with the IMF the previous week, which could unlock around $1.21 billion under its existing Extended Fund Facility and climate program.
With privatisation proceeds, the IMF agreement, and ongoing US financing talks all in motion at once, the coming months should show whether Pakistan’s reform push can actually deliver the growth and revenue officials are projecting.
