The World Bank has unveiled a strategic 10-year country partnership framework for Pakistan that focuses on critical socio-economic challenges from 2026 to 2035. World Bank Vice President for South Asia Martin Reiser officially launched the initiative and earmarked $20 billion to support Pakistan’s development over the next 10 years. The framework focuses on ambitious goals over a five- to ten-year horizon, including reducing poverty, tackling child stunting and addressing climate challenges.
Key goals include promoting clean energy, improving air quality, and promoting sustainable development through public participation. The plan also aims to take measures to increase private investment, employment and trade. The bank said in a report that Pakistan’s economy is recovering from recent crises but still faces several risks, including political instability. She admitted that Islamabad had introduced reforms in the financial, energy and trade sectors to accelerate the pace of growth. “However, confidence is lacking due to past failures,” the World Bank noted. Economic projections indicate a growth trajectory for Pakistan, with the World Bank forecasting an economic growth rate of 2.8% in the current fiscal year, potentially rising to 3.2% next year and 3.4% in 2027.
Inflation is expected to gradually decrease compared to this year’s 11.1% to 8%. % by 2027. It found that the tax-to-GDP ratio is likely to reach 10.9% this year and 11.2% in 2027. The World Bank has also forecast an increase in Pakistan’s debt obligations, with the debt-to-GDP ratio expected to reach 73.8% this year and 74.7% next year. It said the rate was likely to rise to 75.2%. However, the framework recognizes significant challenges.
Pakistan faces high political, governance and macroeconomic risks. The country’s Human Development Index remains low, scoring a very low 41 out of 100 on the Human Capital Index. The bank also said that one in three children between the ages of five and 16 were out of school, representing 25.4 million children out of school and a potential economic loss of 9% by 2050 due to climate change. The report says 2.6 million children have been deprived of education following the coronavirus pandemic and floods. Pakistan’s economy is likely to lose 9% by 2050 due to climate change, says a World Bank report, adding that the state’s footprint in Pakistan’s economy is very high. The government has more than 200 government institutions worth 48% of GDP.
Emphasizing poverty eradication and food security, the World Bank emphasizes the importance of investment in social protection and human resources, recognizing Pakistan’s growing population of more than 240 million as a potential development opportunity. Reiser emphasized that achieving these Country Partnership Framework goals requires continued hard work and a coordinated strategy between the private and public sectors over 10 years. “These goals will not be achieved in a few months or in one to two years,” he stressed. Prime Minister Shehbaz Sharif also attended the inauguration of the framework, which highlighted a major milestone in Pakistan’s economic development. At the event, the Prime Minister highlighted the World Bank’s long-term support to the country across various sectors. “The World Bank has supported Pakistan at various times.
It has helped Pakistan in various sectors,” he noted. Key strengths of the partnership include: – 10-year country partnership framework – Investment commitment of USD 20 billion – Focus on six key sectors, including climate change, agricultural development and information technology Shehbaz Sharif further emphasized that the ongoing digital transformation of the Federal Bureau of Revenue is of utmost importance and recalled that an anonymous system has been created for Port and Customs officials in Karachi. He reiterated the potential of additional revenue in trillions of rupees through such systemic reforms.
The prime minister noted that the reforms being introduced should have been started decades ago. He emphasized that the funds will be directed to critical areas such as education and health, with the primary aim of eliminating corruption. “The government team is trying to achieve difficult but impossible tasks and goals.” Shehbaz also noted that the presence of the World Bank vice president is a “guarantee of Pakistan’s development”, underscoring the international financial institution’s confidence in the country’s potential.
