Key Takeaways
- The Finance Division claims a decline in net fiscal flow from SOEs does not indicate poor financial health.
- Profitable SOEs generated Rs. 423.3 billion in aggregate profits, while loss-making SOEs had losses of Rs. 342.8 billion.
- Reforms and privatizations are ongoing, with strong investor interest in the first batch.
The Finance Division has issued a statement defending the performance of state-owned enterprises (SOEs), stating that a decline in net fiscal flow does not reflect their financial health.
According to the Finance Division, fiscal flows and SOE financial performance are separate measures, with fiscal flows primarily reflecting transactions between the government and SOEs.
During the first half of fiscal year 2025-26, profitable SOEs generated Rs. 423.3 billion in aggregate profits, while loss-making SOEs had losses of Rs. 342.8 billion, indicating a containment of losses.
The government reported that SOEs generated Rs. 839.8 billion in inflows for the government, against outflows of Rs. 804 billion, resulting in a positive net fiscal flow of Rs. 35.8 billion.
The increase in government outflows was driven by equity injections and financing linked to restructuring and circular debt management, with dividends increasing by 26 percent and tax contributions rising by 10 percent.
The Finance Division emphasized that changes in net fiscal flow should be viewed in the context of the timing and composition of government and SOE transactions, rather than as a standalone measure of profitability or financial performance.
Reforms and privatizations are ongoing, with the government noting that broader restructuring and privatization efforts are underway, including the privatization of Utility Stores Corporation, Pakistan Agricultural Storage and Services Corporation, and First Women Bank Limited.
Pakistan International Airlines has also been privatized, and nine distribution companies in the power sector are included in the privatization program, with varying stages of the transaction process.
The government is addressing challenges across the SOE portfolio through restructuring, closure, privatization, and stronger performance management based on the circumstances of each entity.
