ISLAMABAD: Pakistan’s economy has started showing signs of improvement and is transitioning from crisis to stability due to stringent measures taken by the government in the last year, the country’s de-facto finance minister, Dr. Abdul Hafeez Shaikh, told Arab News on Sunday, ahead of an expected staff-level delegation visit by the International Monetary Fund (IMF) next week.
Islamabad signed off on a $6 billion bailout package from the IMF in May this year to resuscitate the country’s ailing economy. The Fund’s 39-month program is aimed at supporting “the authorities’ economic reform program” and to help “reduce economic vulnerabilities and generate sustainable and balanced growth.”
“The difficult economic decisions of the government over the past year have started yielding results … our economy has started moving from crisis to a stable regime,” said Shaikh whose official title is that of adviser to Prime Minister Imran Khan on Finance.
Shaikh said the government was taking all measures into account, including an increase in tax and non-tax revenues and a cut in government expenditures to “keep the primary balance at 0.6 percent as agreed upon with the IMF.”
The country’s exchange rate, foreign exchange reserves, and stock exchange market had all “shown stability” in the past two months, he said, while the government was focused on reviving the confidence of investors and businessmen in the country’s financial system.
“We are confident not only to achieve the target of 2.4 percent of the GDP set for this year but hope to move much ahead of it due to incentives offered to agriculture and industry,” he said.
The government has announced an Rs. 250 billion special packages for its agricultural sector, which should help achieve growth of three percent in the industry this year, he said, and added that agricultural growth had remained negative in the last five years.
Prime Minister Khan’s government has set an ambitious revenue target of Rs 5.5 trillion for this financial year to steer the country out of economic crisis and fund its development projects across the country.
“We are expecting to collect around one trillion rupees through the non-tax revenue this year, while there is over 15 percent increase in tax collection in the first two months of this fiscal year,” Shaikh said.
He added that his government was standing in front of all the “lobbies and mafias” to improve the country’s economy.
“Our sole purpose is to come up to the expectations of the people and provide them relief by keeping the inflation in check,” he added.
Earlier, a senior member of the government’s Economic Advisory Council, Dr. Ashfaque Hassan Khan, told Arab News that the targets set in the IMF bailout program “were grossly unrealistic” and unachievable in the present economic environment while another senior analyst, Dr. Vaqar Ahmed, said Pakistan’s primary tax collecting body, the Federal Board of Revenue (FBR) was “certainly struggling to meet the targets” set by the IMF.
“The FBR devised a new (tax and revenue) system to achieve the Rs. 5.5 trillion targets. But capacity gaps here are preventing the country from achieving the target,” Ahmed said.
Economy moving from ‘crisis to stability’ — Finance Adviser
Economy moving from ‘crisis to stability’ — Finance Adviser
- Says government taking every measure to keep the primary deficit at 0.6 percent as agreed with IMF
- Rs1 trillion non-tax revenue target set for December next year
Pakistan PM orders accelerated privatization of power sector to tackle losses
- Tenders to be issued for privatization of three major electricity distribution firms, PMO says
- Sharif says Pakistan to develop battery energy storage through public-private partnerships
ISLAMABAD: Pakistan’s prime minister on Monday directed the government to speed up privatization of state-owned power companies and improve electricity infrastructure nationwide, as authorities try to address deep-rooted losses and inefficiencies in the energy sector that have weighed on the economy and public finances.
Pakistan’s electricity system has long struggled with financial distress caused by a combination of factors including theft of power, inefficient collection of bills, high costs of generating electricity and a large burden of unpaid obligations known as “circular debt.” In the first quarter of the current financial year, government-owned distribution companies recorded losses of about Rs171 billion ($611 million) due to poor bill recovery and operational inefficiencies, official documents show. Circular debt in the broader power sector stood at around Rs1.66 trillion ($5.9 billion) in mid-2025, a sharp decline from past peaks but still a major fiscal drain.
Efforts to contain these losses have been a focus of Pakistan’s economic reform program with the International Monetary Fund, which has urged structural changes in the energy sector as part of financing conditions. Previous government initiatives have included signing a $4.5 billion financing facility with local banks to ease power sector debt and reducing retail electricity tariffs to support economic recovery.
“Electricity sector privatization and market-based competition is the sustainable solution to the country’s energy problems,” Prime Minister Shehbaz Sharif said at a meeting reviewing the roadmap for power sector reforms, according to a statement from the prime minister’s office.
The meeting reviewed progress on privatization and infrastructure projects. Officials said tenders for modernizing one of Pakistan’s oldest operational hubs, Rohri Railway Station, will be issued soon and that the Ghazi Barotha to Faisalabad transmission line, designed to improve long-distance transmission of electricity, is in the initial approval stages. While not all power-sector decisions were detailed publicly, the government emphasized expanding private sector participation and completing priority projects to strengthen the electricity grid.
In another key development, the prime minister endorsed plans to begin work on a battery energy storage system with participation from private investors to help manage fluctuations in supply and demand, particularly as renewable energy sources such as solar and wind take a growing role in generation. Officials said the concept clearance for the storage system has been approved and feasibility studies are underway.
Government briefing documents also outlined steps toward shifting some electricity plants from imported coal to locally mined Thar coal, where a railway line expansion is underway to support transport of fuel, potentially lowering costs and import dependence in the long term.
State authorities also pledged to address safety by converting unmanned railway crossings to staffed ones and to strengthen food safety inspections at stations, underscoring broader infrastructure and service improvements connected to energy and transport priorities.
