Finance minister vows to ‘accelerate’ privatization of Pakistan state-owned assets ahead of IMF talks

Pakistan's Finance Minister Muhammad Aurangzeb speaks during an interview with AFP at the Embassy of Pakistan in Washington, DC on April 15, 2024. (AFP/File)

• Among main entities, Pakistan is pushing to privatize its national carrier, the Pakistan International Airlines
• Muhammad Aurangzeb confirms IMF team has arrived in Pakistan for talks next week on new loan program

ISLAMABAD: Finance Minister Muhammad Aurangzeb on Sunday vowed to accelerate privatization of state-owned entities (SOEs) in Pakistan as Islamabad gears up to hold crucial talks for a bailout package with the International Monetary Fund (IMF) next week.
Under the last $3 billion bailout package from the IMF that was critical in averting a sovereign debt default last year, the lender has said SOEs whose losses are burning a hole in government finances would need stronger governance. Pakistan is now negotiating with the IMF for a larger, longer program for which it must implement an ambitious reforms agenda, including the privatization of debt-ridden SOEs.
Among the main entities Pakistan is pushing to privatize is its national flag carrier, the Pakistan International Airlines (PIA). The government is putting on the block a stake ranging from 51 percent to 100 percent.
Aurangzeb confirmed that an IMF mission had arrived in the country and Islamabad would discuss next week the contours of another loan program with the team.
“We will take this forward and there will also be public-private sector partnership in it,” Aurangzeb said about the privatization of SOEs at a pre-budget conference in Lahore. “We will accelerate the privatization agenda.”
The finance minister said he and Deputy Prime Minister Ishaq Dar were on the “same wavelength” that there are no strategic SOEs.
“After a meeting tomorrow, we will go back to these ministries to say, ‘Hand over all of these [assets] to the private sector,’” he said.
Aurangzeb said investors’ confidence in the country’s economy was improving and credited the government’s policies for the positive outcome.
Pakistan needed structural reforms and the business community should be made a part of the tax net like the salaried class, he added.
Pakistan’s key stock index crossed the 73,000 mark on Friday to close the weekend trading session at an all-time high, as investors banked on renewed hopes of an interest rate cut and improving economic indicators in the country.
Pakistan saw one of the highest inflation regimes last year, with 38 percent inflation recorded in May 2023, which eased to 17.3 percent this April. Pakistani analysts expect a further fall in May, renewing optimism of an interest rate cut from the current 22 percent in the upcoming monetary policy.