Pakistan’s incomes could triple by 2050 with faster reforms: World Bank

October 22, 2026 (MLN): Pakistan’s incomes could triple by 2050 if the country accelerates structural reforms to support private investment and sustain higher economic growth, according to the World Bank Group’s latest Pakistan Development Update: Attaining Escape Velocity.

Advisor to the Finance Minister Khurram Schehzad on Thursday shared the key findings of the report on social media platform X, saying the World Bank had acknowledged Pakistan’s progress in restoring macroeconomic stability, strengthening fiscal discipline and advancing structural reforms.

The report states that Pakistan has an opportunity to achieve faster economic growth and create more jobs following progress in macroeconomic stabilization.

Pakistan’s real gross domestic product (GDP) growth rose to 3.7% in FY26, up from 3.2% in FY25, despite the impact of the Middle East conflict.

Revenue growth and spending restraint helped the country achieve a record primary fiscal surplus of 2.9% of GDP in FY26, while strong remittance inflows supported the rebuilding of foreign exchange reserves.

These improvements also contributed to credit rating upgrades by S&P and Moody’s and enabled Pakistan to return to international debt markets through a $3 billion Eurobond issuance.

“Pakistan has made real progress in restoring stability, and markets have taken notice,” said Bolormaa Amgaabazar, World Bank Country Director for Pakistan.

However, she noted that real per capita growth, which measures the increase in the average income of an individual, remains around 1.6%, underscoring the urgent need for reforms to accelerate economic expansion.

According to the report, Pakistan could achieve sustained annual growth of 6.2% to 6.9% by adopting ambitious economic reforms and upgrading its policies and institutions to the standards of the average middle-income country.

Such growth could enable Pakistan to reach Viet Nam’s current income level by 2050.

“With macro stabilization achieved but fiscal resources and foreign exchange still tightly constrained, structural reform to encourage private investment is the necessary next step towards higher living standards,” said Sebastian Essl, lead author of the report.

He emphasized that achieving private-sector-led growth would require a clear plan, effective coordination and sustained commitment to implementing reforms.

The report outlines a series of measures that could help Pakistan reach the per capita income levels of countries currently classified at the upper-middle-income threshold by 2050.

Several initiatives are already underway, including timely adjustments to power sector tariffs, which helped reduce energy subsidies from 1.1% of GDP in FY25 to 0.8% in FY26.

Other measures include continued trade liberalization under the National Tariff Policy and the recent privatization of Pakistan International Airlines.

The report stresses that sustaining progress will require further improvements to the business environment, tax system and access to finance, alongside reducing the state’s role in the economy.

Faster and consistent implementation of these reforms would be critical to encouraging private investment, generating employment and improving living standards over the coming decades.

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