According to the report, average core inflation in urban areas stood at 7.4% during fiscal year 2025–26, while the overall fiscal deficit declined to 2.6% of gross domestic product (GDP).
However, rising fuel and transportation costs continued to put pressure on consumers. Between February and June 2026, petrol prices increased by approximately 36%, while high-speed diesel prices rose by 31%. Liquefied petroleum gas (LPG) prices recorded an increase of around 46%, and transport fares climbed by approximately 30%, the report said.
The report also noted that international credit rating agencies S&P Global Ratings and Moody’s had upgraded Pakistan’s credit ratings, indicating an improvement in the country’s credit assessment.
Reacting to the economic challenges facing the country, former Punjab governor Chaudhry Muhammad Sarwar said that the World Bank’s latest report highlighted the growing economic and social disparities between urban and rural populations. He said that 80% of the extremely poor population lived in rural areas, where employment opportunities, education and healthcare facilities remained inadequate.
Sarwar said wealthier people spent around 20–30% of their monthly income on food, compared with 70–80% among rural residents, describing the disparity as unjust. He argued that national resources had been concentrated in a few major cities for decades, with billions of rupees allocated to urban development projects while rural development funds were also diverted towards high-profile city schemes.
He attributed the widening gap between rich and poor to one-man decision-making and financial mismanagement, stressing that every Pakistani had an equal right to the country’s national resources, education and employment opportunities. He said elected assemblies had a fundamental responsibility to address economic and social inequality.
Sarwar also highlighted the work of the Sarwar Foundation in underserved areas, including education, healthcare, clean drinking water and skills training for women. Its initiatives include a school in Pir Mahal, Toba Tek Singh, hospitals in Rajana and Chichawatni, and the Hunargah skills-development programme.
However, he stressed that lasting improvements in ordinary people’s lives would require the fair and equitable distribution of state resources, rather than relying solely on the efforts of non-governmental organisations. He urged provincial governments to announce Provincial Finance Commission (PFC) awards, similar to the distribution of federal resources under the National Finance Commission (NFC) Award, to ensure that districts receive their fair share of funding.
While the reported economic growth and lower fiscal deficit point to improvements in some economic indicators, rising fuel and transport costs and persistent rural deprivation remain significant challenges for Pakistan’s economy.
