Pakistan, WB reaffirm commitment to economic reforms and sustainable development

Islamabad: Pakistan and the World Bank on Monday reaffirmed commitment to continued collaboration in order to advance the reform agenda and drive positive change for the future of Pakistan’s economy.

The commitment came during a follow-up meeting held between Minister for Finance and Revenue, Senator Muhammad Aurangzeb and the World Bank team to discuss Pakistan’s national growth and fiscal programme under the 10-year Country Partnership Framework (CPF), with $20 billion commitments.

According to press release issued by finance ministry, the framework focuses on key development areas including health, education, climate resilience, and sustainable growth. Among others, the meeting was attended by senior officers from the Ministry of Finance and the Federal Board of Revenue.

The primary focus of the meeting was a continued discussion on the WB’s investment financing for economic reforms, the press release said adding the bank team presented their ongoing work regarding the preparation of a comprehensive National Growth and Fiscal Programme.

This programme covers a wide range of critical subjects related to economic and fiscal reforms, including strategies aimed at unlocking constraints to inclusive and sustainable growth, mobilising revenues, improving expenditure quality, and enhancing efficiency and accountability in service delivery.

A major goal of these reforms is to create the necessary conditions for increased productive private investment while ensuring more public resources are allocated for inclusive development.

The World Bank also briefed the finance minister on their ongoing data analysis of policy proposals and recommendations gathered from various chambers, trade bodies, and associations during the pre-budget consultations.

This collaborative approach is aligned with the government’s early budget process, which was brought forward to January this year to ensure a robust and realistic revenue policy based on sound economic considerations.

During the meeting, Aurangzeb emphasised the need for a comprehensive and integrated approach to fiscal, trade, and private sector reforms that spans both the federal and provincial levels.

He highlighted the importance of designing reforms that are incentivized through outcome-based and performance-based indicators directly linked to human development and socio-economic growth.

The finance minister reiterated that a nationally coordinated approach, as exemplified by the National Fiscal Pact, is crucial to ensuring macroeconomic stability. He stressed that this unified approach would be the cornerstone for achieving the country’s aspirations for inclusive and sustainable economic growth, ensuring the well-being of all citizens.

$20bn funding programme

Earlier in January, the World Bank launched its multi-billion funding programme, Country Partnership Framework for Pakistan from FY26 to FY35, which Prime Minister Shehbaz Sharif termed as a "timely intervention" to help Pakistan cope with several challenges, including economy, poverty and climate change crisis.

During the ceremony, Vice President Raiser pledged the World Bank's continued assistance to Pakistan and highlighted that six sectors were being targeted under the 10-year framework.

The international financial institution unveiled its plan for Pakistan, pledging $20 billion in areas including clean energy and climate resilience.

The World Bank said that policy and institutional reforms to boost private sector growth and expand fiscal space for government investment in crucial areas would also be key.

The World Bank has currently committed about $17 billion to Pakistan for 106 ongoing projects.

The country has teetered on the brink of economic crisis for several years and economists and international financial institutions have called for major economic reforms.

Pakistan is currently under a $7 billion International Monetary Fund bailout programme, which requires the country to boost government revenues and shore up external sources of financing, much of which comes from loans from China and Gulf nations.