The World Bank has identified significant risks associated with its $20 billion Country Partnership Framework (CPF) for Pakistan, which aims to support long-term development over the next decade.

Pakistan is grappling with macroeconomic risks, including large external financing needs, a heavy debt burden, and declining investor confidence, exacerbated by external shocks such as global price volatility and climate disasters.

Projected GDP growth for Pakistan is modest, estimated between 2.8% in the fiscal year 2025 and 3.8% by 2029, which contrasts sharply with the government's Uraan Pakistan plan that aims for over 6% growth within five years.

To address these challenges, the CPF design incorporates flexibility through two-year rolling business plans, allowing for adjustments based on changing circumstances while focusing on fewer, targeted outcomes to minimize risks.

Environmental and social risks associated with infrastructure projects, particularly those requiring resettlement, underscore the necessity for robust grievance mechanisms and community engagement.

The framework particularly emphasizes development in underdeveloped and conflict-prone regions like Khyber Pakhtunkhwa and Balochistan, where infrastructure and social development projects face significant instability risks.

Sector-specific challenges, including shifting priorities and limited financing, threaten progress in infrastructure and export-oriented industries, which the World Bank seeks to mitigate through technical assistance.

Fiduciary risks are prevalent due to inefficiencies in public procurement, weak institutional capacity, and concerns over corruption, highlighting the need for improvements in financial systems and project governance.

Frequent changes in government and short political cycles disrupt the continuity of reforms, with policy reversals and weak coordination between federal and provincial governments identified as major impediments.

Key challenges for the CPF's implementation include political uncertainty, governance issues, and macroeconomic instability.

The World Bank stresses the importance of strategic programming based on lessons learned from the previous CPF (2015-2024), advocating for a coordinated approach across different levels of government.

A Risk and Resilience Assessment will be conducted in the first year of the CPF to effectively tackle these challenges.