Pakistan’s fragile job market could come under fresh strain as artificial intelligence reshapes the global workplace, with the World Bank warning that educated young people may face the greatest employment risks unless the country moves quickly to prepare its workforce.
In its World Development Report 2026: The Promise of AI, the World Bank identified Pakistan as one of the more vulnerable economies in the Middle East, North Africa, Afghanistan and Pakistan region. High youth unemployment, limited private sector job creation and a shortage of quality formal jobs leave the country exposed as AI increasingly takes over knowledge-based work.
The report says AI is likely to create the biggest challenges for skilled graduates entering the labour market. While the technology promises higher productivity, it could also reduce opportunities in economies that are already struggling to create enough formal jobs.
The Bank urged Pakistan and other developing countries to pair AI adoption with policies that encourage business growth, improve digital skills and help workers retrain for new roles.
The report also highlighted the widening investment gap between global technology leaders and developing economies. It noted that five US tech companies, Alphabet, Amazon, Meta, Microsoft and Oracle, are expected to spend a combined $775 billion on AI infrastructure in 2026. That figure is almost twice the size of Pakistan’s estimated nominal GDP of $408 billion.
Despite the risks, the World Bank believes AI offers developing countries a rare opportunity to accelerate growth if governments strengthen the foundations needed to support it, including reliable electricity, internet access, digital skills and stronger public institutions.
Globally, the report estimates that only 4.5 percent of jobs in low and middle income countries face immediate automation risks, compared with 14.2 percent in high income economies. At the same time, AI could improve productivity in 16.2 percent of jobs across developing countries, suggesting its greatest value lies in helping workers perform better rather than replacing them.
The Bank warned that countries failing to build the right infrastructure and skills could see AI deepen inequality and widen the gap with advanced economies instead of narrowing it.