Key Points
Key Points
- Pakistan expects over 4% economic growth this fiscal year despite high oil prices.
- A staff-level IMF agreement on Oct 7 could unlock about $1.21B in financing.
- Five to six state firms, including power companies, may be sold to raise over $1B.
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Pakistan’s economy is expected to grow by more than four percent this financial year, even with high oil prices around the world. Finance Minister Muhammad Aurangzeb gave the forecast in an interview with Reuters on October 12, 2026, on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok.
IMF Deal Unlocks $1.2 Billion
The forecast follows a staff-level agreement with the IMF reached on October 7. The deal could unlock about $1.21 billion in new financing through the Extended Fund Facility and the Resilience and Sustainability Facility.
The agreement sits inside Pakistan’s $7 billion, 37-month IMF loan programme signed in 2024. That programme includes tough steps, such as raising tax revenue from farm income. The country of 255 million people still depends on outside financing to build foreign exchange reserves and meet debt repayments.
Aurangzeb was confident about the growth target. “So I’m still quite clear that we should clock north of 4%,” he said. On inflation, he added that the government is “keeping a very close eye” because of its effect on commodity prices.
He also said Pakistan has secured enough fuel and avoided any shortages. Farming, a key part of the economy, is holding up well. Still, Pakistan is seen as highly vulnerable to a longer Middle East conflict because it depends on energy imports from the Gulf, money sent home by workers, and support from the region.
US Talks on $10 Billion Facility
Pakistan is also in talks with the United States over a proposed $10 billion exchange stabilisation facility. Aurangzeb would not give a date for finishing the negotiations. “If it comes through, this will be a great help for us,” he said. “If it doesn’t come through, this does not create any problem for us in terms of access to market.”
Separate talks are also going on with the Export-Import Bank of the United States and the US International Development Finance Corporation.
Privatisation Push Targets $1 Billion
After the privatisation of Pakistan International Airlines last year, about a dozen more state companies are in the pipeline. These include state-owned power distribution companies and the outsourcing of airport operations.
Aurangzeb expects five or six of these deals to be completed during this financial year. Together, they could raise more than $1 billion. Selling loss-making state firms is seen as a key test of Pakistan’s promises to the IMF. “We are quite clear that we want the private sector to lead the country,” he said.
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