ISLAMABAD: Pakistan’s top investment body said on Wednesday it had “resolved with consensus” to fast-track the privatization of state-owned enterprises (SOEs) to help reduce losses to the national exchequer.
Pakistan’s caretaker administration had earmarked 10 cash-bleeding SOEs for privatization on Sept. 21. The decision to privatize these enterprises, which includes Pakistan International Airlines, the national flag carrier, is part of fiscal discipline plans agreed with the International Monetary Fund (IMF) under a $3 billion bailout program signed earlier this year.
On Wednesday, caretaker Prime Minister Anwaar-ul-Haq Kakar chaired the sixth apex committee meeting of the Special Investment Facilitation Council (SIFC), a hybrid civil-military government body Pakistan constituted in June to attract foreign investment in key economic sectors, particularly from Gulf nations.
During its meeting, the SIFC discussed macro-economic issues affecting investment climate in the country, “including inordinate delays in restructuring/ privatization of cash bleeding State Owned Enterprises (SOEs),” the SIFC said.
As of 2020, the accumulated losses for SOEs amounted to 500 billion rupees ($1.74 billion), the finance ministry said last month.
“The committee also resolved with consensus on fast-tracking the privatization process and hence, in the larger interest of the country, reduce recurring losses to the national exchequer,” a statement from the PM office after the SIFC meeting said.
The apex committee also expressed satisfaction over Pakistan’s ongoing negotiations with foreign and domestic investors for the timely realization of various investment prospects, it said.
Pakistan is also discussing outsourcing operations of several of its state-owned assets to outside companies.
In March, Islamabad kicked off the outsourcing of operations and land assets at three major airports to be run under a public-private partnership, a move to generate foreign exchange reserves for its ailing economy.
The government has budgeted only about 15 billion Pakistani rupees ($52.42 million) in receipts from a stalled privatization process in its budget for the fiscal year 2024.
Pakistan’s top investment body resolves to fast-track privatization of loss-making entities
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Pakistan’s top investment body resolves to fast-track privatization of loss-making entities
- PM Kakar chairs sixth apex committee meeting of Special Investment Facilitation Council
- Committee reviews various initiatives spearheaded by SIFC, hurdles for investment climate
IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan
- Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
- Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains
ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.
The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.
Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.
The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.
But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.
The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.
The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.
Despite the progress, Pakistan’s structural weaknesses remain severe.
Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.
The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.
The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.
