The World Bank has announced a positive outlook for Pakistan’s economic recovery, signaling that stabilization is “taking hold” in the country. This comes as the global financial institution has signed a ten-year development agreement aimed at investing $20 billion in Pakistan’s growth, starting from 2026.
The investment will be channeled through the newly launched Country Partnership Framework, which was unveiled last month. The funding will primarily focus on key areas such as clean energy, climate resilience, and sustainable development.
Najy Benhassine, the World Bank’s Country Director for Pakistan, highlighted in a video message on X that this is a significant moment for Pakistan. He emphasized that the current phase of stabilization presents an opportunity for long-term development plans in alignment with the World Bank Group’s priorities for the country.
Benhassine stated, “This is a groundbreaking joint commitment with the government of Pakistan, both at the federal and provincial levels, to address six of the most pressing development challenges facing the country.”
The World Bank’s funding, which is set to begin in 2026, will focus on six core areas: improving education quality, combating child stunting, enhancing climate resilience, increasing energy efficiency, fostering inclusive development, and encouraging private investment.
In a related development, Pakistan’s finance ministry reported in its monthly outlook that consumer inflation is expected to remain stable in February, continuing its downward trend compared to the previous year. The Consumer Price Index (CPI) recorded a significant decrease to 2.4% in January, compared to 24% in the same period last year. Authorities attribute this improvement to economic stabilization measures under the IMF-backed program secured last summer.
The report also highlighted a notable increase in foreign remittances, a vital source of foreign exchange for Pakistan. Remittances during the first half of the fiscal year FY2025 reached $20.8 billion, a 31.7% rise from $15.8 billion during the same period last year.
Furthermore, an IMF mission is scheduled to arrive in Islamabad next week to conduct the first review of Pakistan’s IMF program. The finance ministry anticipates further improvements in the primary surplus, which is a key indicator under the IMF agreement.
