Pakistan’s incomes could triple by 2050 if the country speeds up key economic reforms, according to a new World Bank report.
The report, titled Pakistan Development Update: Attaining Escape Velocity, says Pakistan has made progress in stabilising its economy. It now has a chance to achieve faster economic growth and create more jobs.
How has Pakistan’s economy performed?
Pakistan’s economy grew by 3.7 per cent in FY26, up from 3.2 per cent in FY25.
The World Bank said higher tax revenues and lower spending helped the country achieve a record primary budget surplus of 2.9 per cent of GDP in FY26.
Money sent home by overseas Pakistanis also helped the country build its foreign exchange reserves.
Pakistan also received better credit ratings from S&P and Moody’s. It returned to international debt markets by issuing a US$3 billion Eurobond.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said the country had made real progress in restoring economic stability.
However, income growth for the average Pakistani remains slow at around 1.6 per cent per year.
She said that Pakistan now needs urgent reforms to support faster growth.
What reforms could help Pakistan increase incomes?
The report says Pakistan could achieve annual economic growth of 6.2 to 6.9 per cent if it improves its policies and institutions to match the average standards of middle-income countries.
This could help Pakistan reach Vietnam’s current income level by 2050. The country could also reach the income levels of countries that are currently in the upper-middle-income group.
World Bank report lead author Sebastian Essl said Pakistan needs structural reforms to encourage private investment. He added that this would require proper planning and strong efforts to carry out reforms.
Which reforms has Pakistan already started?
The report highlights several steps Pakistan has taken to improve its economy.
These include changes in electricity tariffs that helped reduce energy subsidies from 1.1 per cent of GDP in FY25 to 0.8 per cent in FY26.
Pakistan has also continued trade reforms under the National Tariff Policy and recently privatised Pakistan International Airlines.
However, the World Bank said more work is needed to support long-term growth.
Pakistan needs to improve the business environment, reform its tax system and reduce the government’s role in business activities. Expanding access to finance is also important.
The report says continued progress on these reforms could help Pakistan attract private investment, create jobs and raise incomes over the coming decades.
