Islamabad, Saturday, 20 December 2025 – The Board of Executive Directors of World Bank approves $700 million in financing for Pakistan on Friday. This funding aims to promote macroeconomic stability and enhance public services. It forms part of the Public Resources for Inclusive Development – Multiphase Programmatic Approach (PRID-MPA). The multi-year programme could reach up to $1.35 billion in total.
Of the approved amount, $600 million supports federal programmes. The remaining $100 million aids a provincial initiative in Sindh. The results-based design disburses funds only after objectives are met.
This approval follows a $47.9 million World Bank grant in August for improvements in primary education in Punjab province.
World Bank $700 Million Pakistan Economic Stability Reforms
The PRID-MPA supports federal and provincial reforms to mobilise domestic revenue. It enhances spending quality by utilizing data and digital tools for improved services.
The programme aligns with Pakistan’s IMF-Extended Fund Facility and the National Fiscal Pact. It addresses structural issues in revenue collection and budget execution.
“Pakistan’s path to inclusive, sustainable growth requires mobilising more domestic resources and ensuring they are used efficiently and transparently to deliver results for people,” said Bolormaa Amgaabazar, World Bank Country Director for Pakistan.
She added that the initiative works with the federal and Sindh governments. It aims for tangible impacts, such as predictable funding for schools and clinics. It promotes fairer tax systems and stronger data for decision-making. The focus safeguards social and climate investments while building public trust.
The federal component emphasises raising revenues fairly. It improves budget planning and execution. It strengthens data systems for evidence-based decisions.
Key actions include reforms to tax policy and administration. The programme finances and scales the Integrated Financial Management Information System. It links to an e-procurement platform. It undertakes targeted subsidy reforms. It bolsters the national statistical system under the Pakistan Bureau of Statistics.
The programme directly increases resources for inclusive development. This includes equitable financing for primary healthcare facilities. It provides more funding for schools.
In Sindh, it raises provincial revenues. It enhances payment speed and transparency. It broadens the use of data for provincial decisions.
Pakistan World Bank Loan Macroeconomic Stability Focus
“Strengthening Pakistan’s fiscal foundations is essential to restoring macroeconomic stability, delivering results and strengthening institutions,” said Tobias Akhtar Haque, Lead Country Economist for the World Bank in Pakistan.
“Through the PRID-MPA, we are launching a coherent nationwide approach to support reforms that expand fiscal space, bolster investments in human capital and climate resilience, and strengthen revenue administration, budget execution, and statistical systems,” he stated.
He noted these reforms ensure resources reach frontline services. They deliver better outcomes across Pakistan with greater efficiency and accountability.
The funding arrives as Pakistan navigates recovery from recent economic pressures. It builds on stabilisation efforts supported by multilateral lenders.
An IMF-World Bank report from November highlighted challenges. It noted fragmented regulation, opaque budgeting, and political capture, which curbs investment and weakens revenue. These issues persist despite progress in short-term stability.
The World Bank approves $700 million in support for Pakistan, signaling a continued international commitment. It facilitates fiscal consolidation and the structural changes necessary for sustained growth.
Background
Pakistan faces ongoing macroeconomic challenges. These include high debt levels and reliance on external financing. Recent inflows from the IMF and other international institutions have helped rebuild the country’s reserves.
The PRID-MPA builds on prior World Bank engagements. These include education and infrastructure projects across provinces.
Reforms under this programme target long-term fiscal discipline. They promote transparency in public resource management.
What’s Next
Future phases of the PRID-MPA could unlock additional financing. This depends on achieving reform milestones.
Disbursements tied to verifiable results. This includes improved revenue collection and service delivery indicators.
The initiative supports alignment with broader economic goals. These encompass human capital development and climate resilience in South Asia.
The World Bank approves $700 million in financing for Pakistan, marking a step toward enhanced fiscal space. It aims for inclusive growth through efficient resource use.
Published in SouthAsianDesk, December 20th, 2025
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