The World Bank has rated Pakistan’s two $670 million loan programmes as “moderately satisfactory” but flagged substantial risks, underscoring the fragile state of the country’s tax‑reform push.
Key Facts on the PRID‑MPA and Connected Punjab Loans
- PRID‑MPA, a $700 million package, aims to lift Pakistan’s tax‑to‑GDP ratio from 12.3 % to 15 % by 2030.
- Connected Punjab, worth $70 million, targets broadband, AI readiness and cash‑less transactions until 2031.
- Both programmes carry a “substantial risk” rating due to political, governance and macro‑economic uncertainties.
- An advance of $164.5 million was disbursed on June 29, 2025, with strong progress on most disbursement‑linked indicators.
- Delays in appointing a chief statistician and other governance gaps have been highlighted as critical compliance risks.
Background: Pakistan’s Tax‑Reform Landscape
Since 2022, Pakistan has pursued a multi‑phase strategy to broaden its tax base, reduce reliance on oil, and improve public service delivery. The PRID‑MPA builds on earlier reforms, leveraging data analytics and digital tools to streamline revenue collection. The Connected Punjab initiative reflects a broader push to digitise provincial services, a trend that has gained traction amid global AI adoption.
Future Impact: Risks and Opportunities Ahead
While the World Bank’s rating signals caution, the programmes still offer a pathway to fiscal consolidation and service‑delivery gains. Successful implementation could raise the tax‑to‑GDP ratio, enhance investor confidence, and provide a template for other emerging markets. However, persistent governance gaps and political volatility may stall progress, prompting the bank to monitor compliance closely and push for faster appointment of key officials.