ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan has accelerated its economic modernization agenda through a wide-ranging reform program focused on privatization, digital governance, and industrial cooperation under the second phase of the China-Pakistan Economic Corridor (CPEC), according to the Finance Division’s Monthly Economic Update & Outlook (October 2025).
Reform momentum and investor confidence
The report said that steady progress in structural reforms has strengthened Pakistan’s global standing, reflected in improved credit ratings and investor sentiment. The government’s reform momentum, backed by the IMF Staff-Level Agreement under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), is now translating into institutional improvements promoting fiscal discipline and transparency.
The Finance Division emphasized that privatization remains central to fiscal consolidation. The plan seeks to reduce the burden of loss-making state-owned enterprises (SOEs) while encouraging private-sector investment in energy, aviation, and industrial sectors. Several entities have reached the transaction preparation stage, with key cases under review for strategic partnership models.
Privatization and digital governance
Privatization, the report added, is being closely aligned with the national digital governance framework to ensure transparency and public participation. The digitalization of financial and administrative systems across ministries is enabling real-time fiscal monitoring and faster decision-making.
The government has expanded its e-governance drive through initiatives such as Pakistan Single Window (PSW), WeBOC 2.0, and the National Digital Payment Gateway. These systems aim to improve tax collection, streamline trade processes, and enhance the ease of doing business. The rollout of paperless customs and public procurement systems is also expected to reduce leakages and corruption.
Advancing CPEC Phase-II
CPEC’s second phase has entered a more mature stage centered on industrial cooperation, technology transfer, and joint ventures. Projects in development include new special economic zones, renewable energy parks, and digital infrastructure corridors. The Finance Division said the government remains committed to transforming CPEC into a model for sustainable and inclusive growth.
Economists said that the combination of privatization and digital governance reforms could mark a turning point for Pakistan’s economic structure. They noted that privatization helps limit fiscal risk, while CPEC’s industrial linkages can create lasting productivity and export gains.
Improved financial and investment outlook
The report said these reforms have already improved foreign investor sentiment. Credit default swap (CDS) spreads have narrowed by over 2,200 basis points in 15 months, while Pakistan’s Sustainable Financing Framework received an “Excellent” alignment score from Sustainable Fitch for compliance with global standards in green and social finance.
Analysts said that improved debt sustainability, coupled with rising investment inflows, would reinforce Pakistan’s external resilience. They added that consistent reform implementation could support a stable growth phase led by diversified exports and efficient public institutions.
Focus on long-term transformation
The Finance Division concluded that digital transformation, transparency, and institutional reform remain the backbone of Pakistan’s economic renewal strategy. It stressed that the success of these efforts depends on ensuring that fiscal and governance improvements deliver measurable social and economic outcomes.