ISLAMABAD (Reuters/APP) - Pakistans economy has made progress through tough reforms but still needs to boost tax revenues and increase power supplies to improve finances, the World Bank said on Friday. According to World Bank Press statement, during a two-day visit to Pakistan, World Banks Vice-President for South Asia, Isabel Guerrero, called on President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani and key officials, including the governments economic team led by the Finance Adviser to the Prime Minister Dr Abdul Hafiz Sheikh to discuss the economy and vital reforms in the power sector and tax administration and she noted substantial economic progress since her last visit in 2008. She pledged continued support for Pakistans efforts to boost tax revenues and expand the supply of power in the country. She noted Pakistans reserves had rebounded, the World Bank said in a statement. But Guerrero said further action was needed. To become independent of foreign aid, Pakistan needs to strengthen its own revenue generation, she said in a statement. The government has pledged to keep the fiscal deficit at 4.9 per cent of gross domestic product (GDP) in the 2009/10 (July-June) fiscal year under its agreement with the International Monetary Fund, but it has said it could rise to 5.3 per cent. GDP growth this fiscal year is forecast at 3.3 per cent but could go up to 3.4 per cent, compared with 2 per cent last year, officials say. But revenue collection is a chronic problem which successive governments have failed to come to grips with. The World Bank will provide strong support to expand power supply in the coming years, and at the same time, work with the sector to continue to improve its financial health and quality of services, said Guerrero. According to Press release, government has implemented tough economic measures to stabilise the economy and the countrys fiscal deficit has declined and foreign exchange reserves have rebounded. The implementation of these measures will help steer the country back onto a high growth path for significant poverty reduction. To become independent of foreign aid, Pakistan needs to strengthen its own revenue generation, Guerrero said. Resources to finance more schools, health centres, roads and other critical infrastructure remain severely limited. The Bank is supporting implementation of the Governments plan to introduce a national broad-based VAT on goods and services which we have seen bring in substantial additional revenues in countries worldwide, she added. In her meetings with officials including Shakil Durrani, Chairman of the Water and Power Development Authority, she discussed the need for actions to increase efficiency and reduce losses. The Government has taken bold actions over the last 24 months to improve the financial health of the power sector. Reducing the cost of subsidies in the budget is important. Now the focus is on reducing costs and freeing up idle generating capacity- for example by allocating more gas to the power sector, Guerrero said at the conclusion of her visit. The World Bank will provide strong support to expand power supply in the coming years, and at the same time, work with the sector to continue to improve its financial health and quality of services. Guerrero also discussed with the Government the Banks upcoming Country Partnership Strategy (CPS) for Pakistan. Spelling out the priorities in the strategy, Guerrero said the Bank will support removal of constraints to economic growth and the Governments capacity to better manage shocks to the macro economy and households. Specific support will also be in areas of economic management, education, conflict risk management and mitigation, and social protection, she said.