KARACHI: Pakistan on Monday approved Rs5.985 billion ($21.5 million) for its national airline to settle key liabilities, as the country’s top economic body also said inflationary pressures were beginning to ease.
Pakistan is seeking to privatize PIA under its $7 billion International Monetary Fund (IMF) program, which calls for reforms to reduce losses from state-owned enterprises. The government plans to sell a 75 percent stake in the airline after offloading a significant portion of its debt to a separate holding structure to make the business more attractive to buyers.
The Economic Coordination Committee (ECC) of the cabinet considered a summary on funding requirements for Pakistan International Airlines’ holding company, which manages the airline’s restructured liabilities as part of an ongoing privatization process.
The committee “approved funding for reimbursement of medical and pension payments as well as for salary disbursements,” a statement by the finance ministry said after a meeting of the ECC.
The airline has long been a major drain on public finances, with repeated privatization attempts failing due to concerns over liabilities, governance and operational inefficiencies.
A consortium led by Pakistani investment firm Arif Habib has agreed to acquire a 75 percent stake in PIA for Rs135 billion (about $482 million), in what is one of the country’s largest privatization deals in decades.
The group includes major industrial players such as Fatima Fertilizer, Fauji Fertilizer, AKD Group, and Lake City Holdings, and is expected to take over management as regulatory and operational conditions are finalized.
Separately, the ECC said inflationary pressures were showing signs of easing, with recent data indicating a slowdown in price increases and stabilization in key food items.
“Recent data indicates gradual stabilization in prices… with emerging trends pointing toward improved price stability,” the statement said.
Officials said prices of several essential commodities, including vegetables, wheat flour and sugar, had declined, while increases in other items remained marginal.
