In a bold move to reshape Pakistan’s economic landscape, the federal government has introduced a five-year strategy to privatise 24 state-owned enterprises (SOEs), laying them out across three distinct phases. The plan, disclosed in Parliament by Privatisation Minister Abdul Aleem Khan, signals a decisive shift away from decades of state control in key sectors.
First Wave: Aviation, Finance, Power Among Early Targets
The initial phase targets 10 entities considered either financially unsustainable or non-essential for government control. Topping the list is Pakistan International Airlines (PIA), which has been haemorrhaging billions annually. Alongside PIA, the Roosevelt Hotel in New York — owned by PIA Investment Ltd — is slated for sale, a move long debated due to its prime Manhattan real estate value.
Other entities in the first batch include:
- Zarai Taraqiati Bank Limited (ZTBL)
- First Women Bank Limited (FWBL)
- House Building Finance Corporation
- Pakistan Engineering Company (PECO)
- Sindh Engineering Limited (SEL)
- Islamabad and Faisalabad Electric Supply Companies (IESCO & FESCO)
Second Round: Massive Power Sector Shake-Up
The second phase expands the privatisation net, largely targeting the energy sector. Four state-owned power generation companies (GENCOs) and multiple regional electricity distribution companies are on the chopping block. These include:
- Gujranwala, Lahore, Multan, Hazara, Hyderabad, Peshawar, and Sukkur Electric Supply Companies (GEPCO, LESCO, MEPCO, HAZECO, HESCO, PECSO, SEPCO)
- Jamshoro, Central, Northern, and Lakhra Power Generation Companies
- Utility Stores Corporation
- Pakistan Reinsurance Company (PRCL)
- State Life Insurance Corporation (SLIC)
These entities, many of which are plagued by chronic losses, overstaffing, or inefficiency, represent a significant portion of government financial liabilities.
Final Phase: Postal Insurance to be Sold Off Last
In the final phase, the Postal Life Insurance Company will be prepared for privatisation. While smaller in scale, this move represents a symbolic conclusion to the government’s broader push to shrink the public sector’s footprint.
The government insists the roadmap is part of a wider economic reform agenda, aiming to streamline operations, attract investment, and cut the budgetary burden of non-performing SOEs.
Inflation in Retreat: Govt Reports Major Drop from Last Year
On the fiscal front, Finance Minister Muhammad Aurangzeb revealed encouraging inflation data, signaling early signs of economic stabilization. Inflation for FY2025 averaged just 4.5% — a dramatic fall from the 23.4% figure recorded in FY2024. For July FY2026, inflation was reported at 4.1%, down from 11.1% in July the previous year.
The minister attributed this decline to “targeted policy measures” and administrative controls, aimed at regulating prices of essential commodities.
To shield vulnerable communities amid ongoing economic reforms, the government has increased social spending significantly. The Benazir Income Support Programme (BISP) received a Rs 716 billion allocation in the 2025–26 budget — a 21% jump compared to the previous year — underscoring the government’s commitment to welfare alongside fiscal tightening.
US-Pakistan Trade Deal: Copper Export Breakthrough, Tariff Relief
Meanwhile, trade relations with the United States are showing renewed momentum.
The Ministry of Commerce shared updates on a recent bilateral agreement that prioritizes US investment in Pakistan’s minerals sector — with a special focus on copper. Under the deal, copper exports from Pakistan will benefit from the removal of a previously steep 50% import tax, opening new commercial avenues for one of Pakistan’s most valuable natural resources.
The agreement also slashes US import tariffs on Pakistani goods from 29% to 19%, providing long-awaited relief to exporters facing competitive pressure in the global market.
Analysts see the deal as a potential turning point for Pakistan’s trade diplomacy, offering both economic and strategic dividends at a time when the country is trying to rebuild investor confidence.
