Pakistan’s state-owned enterprise (SOE) problem is no longer a question of diagnosis. It is a question of economic cost. For years, governments have identified loss-making enterprises, announced restructuring plans and considered privatization. Yet the financial burden has remained. In FY2025, 25 loss-making SOEs recorded combined losses of Rs. 832.8 billion. Profit-making SOEs generated Rs. 709.9 billion, but the sector still recorded a net adjusted loss of Rs. 122.9 billion, compared with Rs. 30.6 billion in FY2024. (Finance Division, Federal SOEs Annual Aggregate Report FY2025). These numbers matter beyond individual balance sheets. Pakistan is pursuing fiscal consolidation, revenue mobilization and efforts to contain fiscal risks. At the same time, the government continues to carry enterprises that consume public resources without generating an adequate economic return. The issue, therefore, is not simply how much SOEs are losing. It is how much the country is losing by delaying decisions about them.

Pakistan’s fourth review under the International Monetary Fund (IMF) Extended Fund Facility is scheduled for September 15, 2026, based on end-June 2026 performance. SOE reform is part of the broader programme to reduce the state’s commercial footprint, strengthen governance and contain fiscal risks. The review provides an opportunity to ask a more practical question: what has changed, what remains unresolved and when will taxpayers see the benefit? (IMF, Pakistan: Third Review Under the Extended Fund Facility, May 2026)

Beyond the annual loss

The Rs. 832.8 billion loss is only the most visible part of the problem. The wider cost can include government support, guarantees, accumulated liabilities, financing costs and the opportunity cost of scarce public capital. Government support to SOEs rose 37% to Rs. 2.078 trillion in FY2025. SOE debt stood at Rs. 9.571 trillion, while unfunded pension liabilities were Rs. 2.030 trillion and government guarantees stood at Rs. 2.164 trillion. These figures show why SOE reform cannot be judged only by annual profit and loss: the fiscal risk also sits in debt, guarantees, pensions and continuing government support. (Finance Division, Federal SOEs Annual Aggregate Report FY2025).

At the same time, the fiscal relationship is more complex than simply adding up government support. SOEs contributed Rs. 2.119 trillion to the government in FY2025, producing a reported net flow to government of Rs. 40.7 billion. The concern, therefore, is not that every SOE is a fiscal drain, but that substantial public support and large liabilities remain concentrated in parts of the portfolio. (Finance Division, Federal........

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