ISLAMABAD: The financial position of Pakistan’s state-owned enterprises (SOEs) worsened significantly during the first full fiscal year of Prime Minister Shehbaz Sharif’s government, with net losses surging by 300% and government fiscal support rising to Rs2.1 trillion, according to data released by the Ministry of Finance on Friday.
Official figures showed that the SOE sector posted an overall net loss of Rs122.9 billion in FY2024-25, compared with Rs30.6 billion in the previous year. Combined revenues of SOEs also declined by more than 10% year-on-year, falling by Rs1.4 trillion to Rs12.4 trillion during the fiscal year ending June 2025.
The results were presented during a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Finance Minister Muhammad Aurangzeb. The committee reviewed the Annual Consolidated Performance Report of Commercial and Non-Commercial SOEs for FY2024-25, prepared by the Central Monitoring Unit (CMU) of the Finance Division.
The Ministry of Finance attributed the decline in revenues largely to reduced profitability in the oil sector, driven by lower international oil prices. Aggregate profits of profit-making SOEs fell by 13% to Rs710 billion, down from Rs821 billion a year earlier.
While losses among loss-making SOEs marginally declined to Rs833 billion, the overall sector still recorded a sharp rise in net losses, highlighting persistent structural weaknesses.
The CMU informed the committee that losses remained heavily concentrated in a small number of entities, particularly in the transport and power distribution sectors. The National Highway Authority and several power distribution companies continued to be major contributors to losses due to structural inefficiencies, high depreciation and financing costs, and the non-commercial nature of certain public service obligations.
During FY2024-25, the government provided Rs2.1 trillion in fiscal support to SOEs, mainly through higher equity injections aimed at clearing circular debt. This marked an increase of over 80% compared to Rs1.1 trillion in support provided in the previous fiscal year. Some of this support has yet to be fully reflected in the federal budget.
At the same time, inflows from SOEs to the government rose to Rs2.1 trillion, supported by higher dividends, tax payments and interest income on government lending.
The report showed that total debt and contingent liabilities of SOEs increased to Rs11.7 trillion by the end of the fiscal year. This included Rs9.6 trillion in loans and accrued interest, along with Rs2.2 trillion in guarantees and off-balance-sheet obligations.
The committee was also briefed on unfunded pension liabilities across SOEs, estimated at around Rs2 trillion, which were identified as a major long-term fiscal risk requiring policy attention.
Finance Minister Aurangzeb said the report demonstrated progress in oversight, transparency and risk identification, particularly in mapping fiscal flows, debt exposure and pension liabilities. Committee members stressed the importance of completing audits in line with the SOEs Act, 2023, and transitioning to International Financial Reporting Standards (IFRS) by February 2026.
The committee directed that the report’s findings be shared with relevant ministries to guide reform efforts and approved the report’s publication, while calling for regular reviews of governance reforms, debt rationalisation and fiscal risk management.