LowIV Macro Policy & Sovereign Debt12 October 2026, Monday
Pakistan expects more than $1bn from privatisation this fiscal year
Finance Minister Aurangzeb said in Bangkok on 12 October that he expects 5 or 6 state-owned enterprises to be privatised this fiscal year, raising more than $1bn. Talks with the US on a $10bn currency stabilisation facility continue without a timetable.
In a Reuters interview dated 12 October and carried by Dawn and The Express Tribune, Aurangzeb said about 12 entities were on the list and he expected 5–6 of them to be completed this fiscal year. The list includes state-owned power distribution companies and the outsourcing of airport operations. The national carrier PIA was privatised last year. The minister forecast growth above 4% this fiscal year.
A week earlier Pakistan reached a staff-level agreement with the IMF. It could unlock about $1.21bn from the $7bn, 37-month programme signed in 2024 and from a climate facility. The programme includes tough measures such as higher taxes on agricultural income. Privatisation is seen as the main test of reform credibility in the eyes of the IMF; if loss-making state companies cannot be sold, budget pressure could build again.
Aurangzeb said the $10bn currency stabilisation facility under discussion with the US would be a major help if it materialised, but its absence would not impair market access. Talks are also under way with the US Exim Bank and the DFC. He said the economy remains fragile because of its dependence on Gulf energy, remittances and financing amid the Iran war, now in its eighth month, and that inflation is being watched closely.
Talay assessment
Bottom line
Fresh from the IMF agreement, Aurangzeb sent markets two messages from Bangkok: the reform timetable is on track, and financing can be found even without the US facility. Yet the $1bn privatisation target rests on the power distribution companies, the hardest part of the list of 12. The most likely path is a few smaller sales during the year and a shortfall against the target.
Likely effects
- IMF programmePositive1–6 months
Completing 5–6 sales would strengthen Pakistan's hand in the reviews that follow the $1.21bn tranche.
- Electricity tariffsNegative6 months+
Privatising distribution companies may pass losses and power theft through to tariffs, keeping consumer bills under pressure.
- FX reservesUncertain1–6 months
The $10bn US facility would support the rupee if it comes; without a timetable, the reserve buffer stays reliant on IMF and Gulf inflows.
Possibilities, ranked
- 1Partial progress55%
Easier items such as airport operations are sold, the distribution companies are delayed, and proceeds fall below $1bn.
Watch: The Privatisation Commission announcing its first distribution company tender
- 2Target met30%
5–6 transactions close by the end of the fiscal year, proceeds exceed $1bn and the IMF review becomes easier.
Watch: Number of transactions closed by June 2027
- 3Timetable collapses15%
Oil prices and political resistance halt the sales, and IMF conditions are reopened for negotiation.
Watch: The privatisation condition being deferred at the next IMF review
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Privatisation target▲ >$1bn
- Growth forecast▲ >4%