The World Bank has warned that Pakistan’s economy is growing too slowly to make a real difference in people’s lives or provide enough jobs for its growing population.
Mukhtar Ul Hasan, an economist with the World Bank, remarked during a briefing in Islamabad that “business as usual is not good for the economy.” He said that “Pakistan’s growth potential has been declining for decades” since the country isn’t very competitive, there haven’t been many structural reforms, and there have been a lot of economic crises. The Bank’s most recent report on Pakistan’s economy was written by Hasan.
The World Bank says that the country’s GDP will grow by 3% in the fiscal year that ends in June and by 3.4% in the next fiscal year. Hasan noted, though, that this pace is not fast enough to handle the almost 1.6 million new people who join the labor field each year.
Pakistan’s central bank, on the other hand, has predicted that growth will be in the top half of its 3.25%–4.25% range. This shows a little more hope, but not enough momentum to solve the country’s long-standing economic problems.
The World Bank research talks about the fundamental problems that South Asia’s second-largest economy is facing, such as policy uncertainty, poor investment, and recurring budgetary crises that have forced Pakistan to ask for help from other countries. The Bank has told policymakers to move away from short-term measures to stabilize the economy and toward a long-term reform program that focuses on increasing productivity, exports, and private sector investment in order to improve incomes and make the economy less vulnerable.
The Bank did say, though, that Pakistan’s economy is starting to stabilize again after almost going into default on its debt two years ago. Inflation has declined sharply, going below 10% in the previous year. This is a big relief after years of record price increases and currency devaluation. This is because consumer demand has slowed down and the economy has made changes.
Christina Wieser, a Senior Economist at the World Bank, says that lower inflation has helped lower the number of poor people to 22% in fiscal 2025, down from 25% the year before. Hasan said that the rate is expected to stay around 21%.
Pakistan has hiked energy costs and started privatizing state-owned businesses, such the money-losing Pakistan International Airlines (PIA), as part of its financing agreement with the International Monetary Fund (IMF).
The World Bank, on the other hand, said that these actions alone are not adequate. Hasan said that Pakistan needs to make “deep and meaningful reforms” in order to get on a path to faster and more sustainable development that will create jobs and improve the quality of life for its people.