World Bank Approves $700 Million Support Package to Help Stabilise Pakistan’s Economy

Pakistan has received a major financial boost as the World Bank approved $700 million in fresh funding to support the country’s ongoing efforts to stabilise its economy and improve the delivery of essential public services. The decision comes at a crucial time, as Pakistan works to move beyond short-term crisis management and focus on deeper, long-term economic reforms.

The funding is part of a wider reform programme aimed at strengthening fiscal discipline, improving transparency in public spending, and ensuring that government resources reach ordinary citizens more effectively — especially in sectors like health and education.

Part of a Larger, Multi-Year Reform Plan

This newly approved amount is not an isolated package. It falls under a long-term reform framework that could eventually provide up to $1.35 billion in financing to Pakistan over several phases. However, future funding will depend on how successfully reforms are implemented and whether agreed performance targets are met.

Out of the current $700 million approval:

• $600 million will be used for reforms at the federal level, and
• $100 million will support a provincial reform programme in Sindh.

The goal is to improve how revenue is collected, how budgets are planned and executed, and how funds are released to critical social services. Authorities hope this will result in more predictable financing for schools, hospitals, and social protection programmes.

Building on Earlier Support for Education

The approval follows an earlier grant of $47.9 million provided in August 2025, which focused on improving primary education in Punjab. That programme aimed to increase school access, enhance teaching quality, and strengthen education governance.

Together, these initiatives highlight a broader strategy — supporting reforms not only at the national level but also within provinces, where most public services are delivered directly to people.

Focus on Fair Taxation and Better Use of Public Money

World Bank officials have stressed that long-term and inclusive growth depends on how effectively a country raises and uses its own resources. According to them, Pakistan’s challenge is not just about securing funds, but about spending those funds efficiently, transparently, and where they are needed the most.

Under the reform programme, authorities are working to:

• Ensure more reliable funding for schools and healthcare facilities
• Create fairer and more efficient tax systems
• Strengthen data and statistical systems to support better policy decisions

At the same time, the programme aims to protect spending on social welfare and climate-related initiatives, while improving public trust in government institutions.

Strengthening the Economy’s Foundations

Economists involved in the programme believe that fixing weaknesses in fiscal systems is essential for long-term economic recovery. Stronger public finance management can help restore macroeconomic stability, improve institutional performance, and deliver better outcomes for citizens.

The reform approach brings together multiple strands — expanding fiscal space, boosting investment in people, strengthening climate resilience, improving revenue administration, and enhancing budget execution. A key focus is ensuring that public money reaches frontline services efficiently, with greater accountability and measurable results.

Addressing Long-Standing Structural Problems

At the federal level, the programme will concentrate on:

• Increasing domestic revenue in a more equitable manner
• Improving budget planning and execution
• Strengthening evidence-based policymaking through better-quality data

The reforms are also expected to support more responsive financing for primary healthcare centres and ensure more predictable funding for schools, particularly in underserved and vulnerable areas.

These efforts come amid concerns raised in recent international assessments, which pointed out that fragmented regulations, weak budgeting practices, and political influence have continued to limit investment and weaken revenue performance in Pakistan.

A Step Toward Sustainable Recovery

While Pakistan has shown signs of short-term economic stabilisation, major challenges remain. High public debt, weak private investment, and governance gaps continue to weigh on long-term growth.

The World Bank’s latest funding aims to tackle these deeper structural issues by supporting reforms that promote efficiency, transparency, and inclusive growth. If implemented effectively, the programme could play an important role in helping Pakistan move toward long-term economic stability, stronger institutions, and improved public services for millions of people across the country.