Aurangzeb hopes PIA privatisation is finalised by July

Finance Minister Muhammad Aurangzeb expects the privatisation of Pakistan International Airlines (PIA) to be completed by the “end of June or early July”.

Aurangzeb made these remarks while addressing the Pakistan, Saudi Arabia Investment Forum in Islamabad on Monday.

“Our prime minister has been very clear that the government has no business being in business and therefore, we need to and we will accelerate the privatisation agenda,” he said.

“We can already see some of the transactions that are in play at the moment – whether it is PIA, our national airline, or the Islamabad Airport – and we certainly hope that by the end of June or early July, we can get these transactions through the finishing line,” he said.

The privatisation of PIA has garnered some interest including from a business conglomerate based in Pakistan.

Last week, the Privatisation Commission (PC) extended the deadline for submitting the Statement of Qualification (SOQ) till May 18, 2024, upon request from the interested parties.

On Saturday, the Competition Commission of Pakistan (CCP) passed a merger order, approving the acquisition of the 100 percent shareholding of Pakistan International Airlines Corporation Limited (PIACL) by PIA Holding Company Limited (Holdco).

The merger order cleared the path for the privatisation of PIA.

Addressing the event on Monday, Aurangzeb said that the International Monetary Fund (IMF) mission is expected to arrive in Pakistan in the next seven to ten days.

Pakistan’s financial year runs from July to June and its budget for fiscal year 2025, the first by new government, has to be presented before June 30.

Pakistan narrowly averted default last summer after inking a $3-billion Stand-By Arrangement (SBA) with the IMF, under which the South Asian country received the last tranche of $1.1 billion from the Fund last month.

Meanwhile, addressing the business delegation on Monday, Aurangzeb shared that Islamabad “requested the IMF during the spring meetings that we want to go into a larger and a longer program with the Fund, and they have acceded to that request.”

“We are expecting that the IMF mission would arrive in Pakistan in the next seven to ten days, where we will start discussing the contours of the new program,” he shared.

Aurangzeb said that Islamabad seeks a new IMF programme for permanence in macroeconomic stability and executing structural reforms.

Pakistan’s tax-to-GDP ratio needs to increase from the current 9% to 14-15%, he said.

“We have to start resolving the complex energy equation, because if we don’t get into competitive energy, we will not be able to get there. The third one is the SOE [state-owned enterprises] reform,” Aurangzeb said.

Addressing the Saudi business delegation, which arrived in Pakistan on Sunday with the aim of signing agreements and MoUs for investment, Aurangzeb expressed the government’s commitment to fully facilitate the private sector to take the country towards export-led growth.

He said the government is focusing on bringing foreign direct investment to uplift various sectors.

Giving an overview of the country’s economic situation, Aurangzeb said it is on a positive trajectory. The agriculture GDP is growing at 5% per annum on the back of bumper crops including that of sugarcane, rice, and wheat.

He was confident that the country’s current account deficit would be less than a billion dollars during this fiscal year.

“Our foreign exchange reserves have recovered to almost over $9 billion, which is about two months of import cover. Our currency has been stable over the last ten months, while the inflation, which peaked at 38% is now down to roughly 17%.

He said foreign buying and institutional investment is also witnessed in Pakistan’s stock market.