BANGKOK: Pakistan’s economy is expected to grow by more than four per cent this fiscal year despite elevated oil prices, as the government looks to privatise five to six entities that could raise more than $1 billion, Finance Minister Muhammad Aurangzeb told Reuters on Monday.

Pakistan’s economy is considered highly vulnerable to a prolonged Middle East conflict, given its dependence on Gulf energy imports, remittances and financing support from the region, even as it remains reliant on external financing to bolster foreign exchange reserves and meet debt repayments.

The country has procured adequate fuel, avoiding shortages, and critical sectors such as agriculture have held up, Mr Aurangzeb said.

“So I’m still quite clear that we should clock north of 4pc,” he said in an interview on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Bangkok.

Aurangzeb sees economy expanding at 4pc, raising $1bn via privatisation

“And on the inflation side, obviously, we are keeping a very close eye because it does have a knock-on impact in terms of the commodity prices.”

After a period of severe economic turmoil exacerbated by the Covid-19 pandemic, the cash-strapped economy has regained some footing, supported by an IMF $7 billion Extended Fund Facility, signed in 2024, which includes tough measures such as raising tax revenue on farm income.

Exchange stabilisation facility

The US-Israel war on Iran, now in its eighth month, and the inflation and hardship it has caused, will dominate the agenda and sideline conversations during the meetings that are being held outside Washington for the first time in three years.

Pakistan, which reached a staff-level agreement with the IMF on Oct 7, potentially unlocking about $1.21bn in financing under the Extended Fund Facility and RSF, is continuing discussions with the US for a proposed $10bn exchange stabilisation facility, Mr Aurangzeb said.

But he declined to provide a timeframe for concluding negotiations.

“If it comes through, this will be a great help for us,” he said, referring to the facility, which is in addition to ongoing talks with the Export-Import Bank of the United States (EXIM) and the US International Development Finance Corporation (DFC). “If it doesn’t come through, this does not, you know, create any problem for us in terms of access to market.”

Privatisation push

Following the privatisation of Pakistan International Airlines last year, Aurangzeb said the government has around another dozen entities in the pipeline, including state-owned power distribution companies and the outsourcing of airport operations.

“I expect about five or six of these to go through during this fiscal year,” he said, adding that they could raise more than $1 billion.

Privatisation has been seen as a key test of Pakistan’s reform credibility with the IMF, with officials previously underlining that failure to offload loss-making state firms risked renewed pressure on public finances.

“We are quite clear that we want the private sector to lead the country,” said Mr Aurangzeb. “So our role is to help support, assist any way we can in terms of the ecosystem.”

Published in Dawn, October 13th, 2026