IMF hails PIA privatisation as 'milestone' in Pakistan's reform drive

• IMF says privatisation meets key $7bn EFF commitment.
• Arif Habib-led consortium buys 75% stake for Rs135bn.
• SOE losses hit Rs122.9bn in FY2024-25, cabinet data shows.

KARACHI: The International Monetary Fund (IMF) has welcomed the privatisation of Pakistan International Airlines (PIA), calling the sale a landmark step in Pakistan’s push to reduce state involvement in commercial sectors, The News reported, citing Arab News.

In a statement provided to Arab News on Saturday, Mahir Binici, the IMF’s resident representative in Pakistan, said the transfer of the national carrier to private ownership fulfils a primary commitment under the $7 billion Extended Fund Facility (EFF).

Binici described the divestment as a milestone in the authorities’ reform agenda aimed at attracting private investment to support long-term economic growth.

The endorsement follows the landmark sale of a 75% stake in PIA to a consortium led by the Arif Habib Group. The deal, valued at Rs135 billion ($486 million), concluded last month following a competitive bidding process. 

This second attempt at privatisation succeeded where a previous effort a year ago failed, largely due to improved operational conditions — including the recent lifting of EU and UK flight bans that was imposed after the airline’s deadly Airbus A320 crash in Karachi in 2020 that killed 97 people — which significantly enhanced the airline’s market value and appeal to private investors.

The IMF’s supportive remarks come as recent government data highlights the mounting financial strain caused by underperforming state entities. According to the Cabinet Committee on State-Owned Enterprises, Pakistan’s SOEs recorded a staggering net loss of Rs122.9 billion ($442 million) during the 2024-25 fiscal year. This figure represents a nearly 300% increase from the Rs30.6 billion net loss reported in the previous year.

While the privatisation process remains a politically sensitive issue — drawing criticism over potential job losses — supporters and international lenders argue that private sector management is essential for improving efficiency and service delivery, Arab News reported.