ISLAMABAD: Faster implementation of structural reforms could see Pakistan’s incomes triple by 2050, according to the World Bank Group’s latest Pakistan Development Update. Following progress with macroeconomic stabilization, the country now has the opportunity for accelerated economic growth and job creation.

According to the World Bank, sound macroeconomic policies in recent years have stabilized the economy and preserved growth, despite challenges from the Middle East conflict. Real GDP growth rose to 3.7 percent in FY26 from 3.2 percent in FY25. Revenue growth and expenditure restraint supported record primary fiscal surpluses, reaching 2.9 percent of GDP in FY26. Strong remittances also contributed to the re-accumulation of foreign exchange reserves. These improvements led to upgrades from major international rating agencies, S&P and Moody’s, enabling Pakistan’s return to international debt markets with the issuance of a $3 billion Eurobond.

The report suggests that Pakistan could achieve sustained growth of up to 6.2-6.9 percent per annum, sufficient for reaching Viet Nam’s current income level by 2050, if it pursues ambitious economic reforms. The necessary reforms include upgrading policies and institutions to match those of an average middle-income country.

Sebastian Essl, lead author of the report, emphasized the need for structural reforms to encourage private investment, which is essential for higher living standards. The report outlines ambitious reforms such as timely power sector tariff adjustments, trade liberalization, and recent privatization efforts. Sustained progress will depend on further reforms to improve the business environment, tax system, and access to finance.

Since joining the World Bank in 1950, Pakistan has received $52 billion in assistance. The current portfolio includes 47 operations with a total commitment of approximately $16.1 billion. The International Finance Corporation has invested and mobilized around $22 billion in Pakistan since 1959, with current commitments of $1.6 billion across 55 projects.