World Bank funding boost for Pakistan: $700 million tranche approved under multi-phase plan - check details

The World Bank has approved $700 million in fresh financing for Pakistan as part of a longer-term programme aimed at supporting macroeconomic stability and improving public service delivery.As per Reuters, the funding has been cleared under the Public Resources for Inclusive Development – Multiphase Programmatic Approach (PRID-MPA), a framework through which Pakistan could receive up to $1.35 billion over multiple phases. The lender said the latest approval represents a major tranche under this broader initiative.Out of the $700 million, $600 million will be directed towards federal-level programmes, while the remaining $100 million will support a provincial initiative in Sindh, Pakistan’s southern province. The focus of the financing is to strengthen public resources and improve the delivery of essential services at both national and provincial levels.The approval comes months after the World Bank extended a $47.9 million grant in August to support primary education reforms in Punjab, the country’s most populous province. Together, the funding decisions signal continued engagement by multilateral lenders with Pakistan as it works to stabilise its economy and manage long-standing structural challenges.

However, concerns over governance and institutional weaknesses remain. An IMF–World Bank report uploaded by Pakistan’s finance ministry in November flagged serious issues, including fragmented regulation, opaque budgeting practices and political capture of public resources. According to the report, these factors continue to deter investment and weaken the country’s revenue base, limiting the effectiveness of economic reforms.The latest World Bank financing also comes at a time when Pakistan remains heavily dependent on external funding to support its economy. Public debt has continued to rise, driven by slower economic growth and sustained borrowing from multilateral institutions. Recent inflows from bodies such as the IMF and other lenders have helped shore up external reserves and support fiscal consolidation efforts, but debt pressures remain elevated.Despite these challenges, Pakistan’s economy has shown signs of gradual recovery following two years of volatility. Growth has picked up modestly, the current account has moved into surplus, and foreign exchange reserves have improved, helped by multilateral disbursements and higher remittance inflows.The World Bank’s phased financing approach allows it to retain leverage over future funding while continuing to support Pakistan’s economic stabilisation efforts. How effectively the new funds translate into lasting reforms and improved service delivery will likely determine the pace and scale of further disbursements under the $1.35 billion programme, as per Reuters.