Pakistan plans to proceed with the full $1.7 billion World Bank financing programme aimed at expanding the tax base and restructuring public expenditure, despite slow progress on its initial phase and concerns over the government’s compliance with key reform commitments, The Express Tribune reported.

The programme, titled Public Resources for Inclusive Development, is being implemented under the World Bank’s Multiphase Programmatic Approach, with financing intended for the federal government and all four provinces. The government has already secured approval for the first $700 million phase, including $600 million for the federal government and $100 million for Sindh. Officials said there were no plans to abandon the remaining financing despite implementation challenges. The next $200 million operation is being prepared for Khyber Pakhtunkhwa, while Balochistan and Punjab are expected to receive financing under the third and fourth phases.

The World Bank has rated progress on the $600 million federal component as “moderately satisfactory” in two consecutive implementation status reports. In its April 2026 assessment, the lender noted that the operation had been approved by its board on 19 December 2025 but had not yet become effective; the rating was unchanged in the October report, although the bank acknowledged progress after the programme became effective on 14 May 2026 and an advance disbursement of $164.5 million on 29 June.

The government faces questions over its adherence to reform conditions, particularly the National Tariff Policy and the National Fiscal Pact. Under the tariff policy, Pakistan is expected to pursue trade liberalisation, but the government increased import taxes in June and the Cabinet’s Economic Coordination Committee approved an additional customs duty in October to protect a tyre manufacturer. On the fiscal pact, which seeks to realign federal and provincial spending in line with the Constitution, the federal government’s approval of Rs87 billion for a project in Sindh in June has raised questions about compliance. The programme’s stated objectives are increasing tax revenues, improving the efficiency and prioritisation of public expenditure, and strengthening statistical systems.

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