Pakistan looking to raise more than $1bn under govt push for privatisation, says finance minister

The Pakistani government aims to raise over $1 billion through the privatization of five to six entities this fiscal year, according to Finance Minister Muhammad Aurangzeb. Despite high oil prices, the economy is expected to grow by more than 4% during the current fiscal year. Pakistan's economy is highly vulnerable to a prolonged Middle East conflict due to its dependence on Gulf energy imports, remittances, and financing support from the region.

The country has managed to procure enough fuel, avoiding any shortages, and critical sectors like agriculture are holding up well. Aurangzeb stated that he remains confident about the growth, and inflation is being closely monitored as it can impact commodity prices. Following the privatization of Pakistan International Airlines last year, the government has around dozen more entities in the pipeline, including power distribution companies and airport operations, which could raise over $1 billion.

Privatization has been seen as crucial for Pakistan's reform credibility with the International Monetary Fund (IMF), and failure to offload loss-making state firms could put additional pressure on public finances. Pakistan has reached an agreement staff-level with the IMF, potentially unlocking approximately $1.21 billion in financing under the Extended Fund Facility and a climate program.

The US-Israeli-led war with Iran and the resulting inflation and hardship in Pakistan will be the main topics of discussion during the IMF and World Bank annual meetings in Bangkok. Pakistan is also negotiating with the United States for a proposed $10 billion exchange stabilisation facility, which would be a significant help for the country, but the time frame for the conclusion of negotiations has not been disclosed.