Faster reforms could triple Pakistan’s incomes by 2050, says World Bank

The World Bank has stated that Pakistan's incomes could triple by 2050 if the country accelerates the implementation of structural reforms, according to its latest Pakistan Development Update titled Attaining Escape Velocity. The report highlights that progress in macroeconomic stabilisation provides Pakistan with an opportunity to achieve faster and sustained economic growth and create more jobs.

Recent years have seen sound macroeconomic policies that have stabilized the economy and maintained growth despite the impact of the Middle East conflict. Real gross domestic product (GDP) growth rose to 3.7% in FY26 from 3.2% in FY25. Revenue growth and expenditure restraint led to record primary fiscal surpluses, which reached 2.9% of GDP in FY26.

Strong remittances also helped rebuild foreign exchange reserves. These improvements have earned Pakistan upgrades from two major international rating agencies, S&P and Moody's, and enabled the country to return to international debt markets through the issuance of a $3 billion Eurobond. World Bank Country Director Bolormaa Amgaabazar acknowledged the progress made in stabilizing the economy, stating that markets have taken notice.

However, she emphasized that real per capita growth, which determines the rate at which the income of the average Pakistani increases, remains stagnant at around 1.6%. The report suggests that higher growth is achievable if Pakistan follows the path taken by other successful countries by pursuing ambitious economic reforms. Improving policies and institutions to the level of the average middle-income country could drive sustained annual growth of 6.2% to 6.9%, potentially allowing Pakistan to reach Vietnam's current income level by 2050.

The report outlines an ambitious set of reforms to enable Pakistan to attain the per capita income levels of upper-middle-income countries by 2050. Many of the proposed measures build on reforms already in progress, such as adjusting power-sector tariffs, continuing trade liberalization under the National Tariff Policy, and privatizing Pakistan International Airlines (PIA).

To achieve sustained progress, further reforms are needed to improve the business environment, overhaul the tax system, reduce state presence in the economy, and expand access to finance.