World Bank says Pakistan could triple incomes by 2050 if it speeds up reforms

Pakistan could roughly triple its people’s incomes by 2050 if it speeds up structural reforms, the World Bank said on Thursday, warning that the country has restored stability but has yet to turn it into faster growth.

In its latest Pakistan Development Update, titled “Attaining Escape Velocity”, the bank said the economy could grow by 6.2% to 6.9% a year over a sustained period if its policies and institutions reached the standard of an average middle-income country.

“Pakistan has made real progress in restoring stability, and markets have taken notice,” said Bolormaa Amgaabazar, the World Bank’s country director for Pakistan.

Steadier, but slow

Real GDP growth picked up to 3.7% in 2025-26 from 3.2% the year before, the report said. The government posted a record primary fiscal surplus, the balance before interest payments, of 2.9% of GDP, and cut energy subsidies from 1.1% of GDP to 0.8%. Pakistan also returned to international debt markets with a $3 billion Eurobond.

But growth per person stayed at about 1.6%.

Sebastian Essl, the report’s lead author, said that with stabilisation achieved but public money and foreign exchange still tight, “structural reform to encourage private investment is the necessary next step towards higher living standards”.

What the bank wants

The report calls for a better business climate, a reformed tax system and a smaller role for the state in the economy, along with wider access to finance. It urges the government to keep adjusting power tariffs on schedule, open up trade under the National Tariff Policy and go ahead with the privatisation of Pakistan International Airlines.

The update came on the same day the IMF said the war against Iran would shrink output across the Middle East, North Africa and Pakistan by 1.3% this year.