Islamabad: The World Bank has greenlit a financing package of $350 million for Pakistan under the second Resilient Institutions for Sustainable Economy (RISE-II) initiative. This funding aims to fortify fiscal management and enhance competitiveness, fostering sustained and inclusive economic growth in Pakistan.
The country’s economy has grappled with challenges such as persistent high inflation and dwindling foreign reserves, prompting the World Bank’s intervention. The financing is strategically designed to address long-standing structural distortions within Pakistan’s economy, providing an opportunity for reform, particularly following the upcoming general elections.
Najy Benhassine, the World Bank Country Director for Pakistan said “Pakistan needs urgent fiscal and structural reforms to restore macroeconomic balance and lay the foundations for sustainable growth,”.
Derek H. C. Chen, the task team leader of the RISE-II plan, emphasized the significance of leveraging this financial support in tandem with contributions from other International Financial Institutions (IFIs). The goal is to set the stage for comprehensive economic development.
The financing’s objectives encompass restoring macroeconomic balance and laying the groundwork for sustainable growth. Specific measures include reducing the cost of tax compliance, enhancing financial sector transparency, promoting digital payments, and stimulating exports by lowering import tariffs. Additionally, fiscal policy coordination, debt transparency, and strengthening property sector taxes are integral components of the funding strategy.
The World Bank underscored that failure to capitalize on this opportunity could potentially subject the country to economic volatility and hinder its progress. The financing package is viewed as a crucial step in steering Pakistan away from stop-and-go economic cycles, towards a path of stability and growth.
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