World Bank urges Pakistan to fast-track private investment

The World Bank has urged Pakistan to fast-track private investment, warning that current levels remain well below targets set under the Country Partnership Framework (CPF) 2026-35.

The Bank also proposed a results-based approach anchored in clear policy milestones, measurable performance indicators, and targeted technical assistance to accelerate implementation and unlock investment

Federal Minister for Finance and Revenue, Muhammad Aurangzeb, held a meeting on Thursday with Bolormaa Amgaabazar, Country Director, World Bank Pakistan, along with their respective teams, to review ongoing collaboration and discuss priority areas under the World Bank’s CPF with Pakistan.

According to the CPF, boosting productive private investment is central to significantly raising Pakistan’s investment-to-GDP ratio over the next decade. Deep-rooted policy and institutional weaknesses—marked by excessive controls, subsidies, taxes, trade protection, and the dominant role of SOEs — have suppressed productivity, investment, and export competitiveness. As a result, private investment remains stuck at around 10 percent of GDP, far below 20–25 percent in India and Bangladesh, while exports have declined from 16 percent of GDP in the 1990s to about 10 percent today. The WBG aims to tackle these structural constraints by supporting a shift toward a more open, export-led growth model. With an estimated additional $60 billion in annual export potential, realizing this opportunity will depend on decisive improvements in the business environment.

The World Bank team briefed the Finance Minister on the progress of ongoing operations and projects under the CPF, including recent developments in fiscal and revenue reforms, macroeconomic stabilisation efforts, and policy-based engagements.

Both sides acknowledged that Pakistan has made progress toward macroeconomic stability through prudent fiscal and monetary policies, and emphasized the need to translate this stability into sustained economic growth, higher investment, and job creation.