ISLAMABAD: The World Bank Group has approved the Development Policy Credit (DPC) worth US $500 million for Pakistan to boost economic growth through fostering private and financial sector development, and mobilizing revenue while expanding fiscal space to meet social needs.

The Fiscally Sustainable and Inclusive Growth (FSIG-II) single-tranche policy credit is the second of a programmatic series of credits.

World Bank Country Director for Pakistan, Rachid Benmessaoud said economic activity is picking up, inflation is significantly declining, tax revenue is increasing and fiscal deficit is narrowing down.

The operation will contribute to the government’s strategy for further accelerating economic growth, increasing private investment, expanding financial inclusion, enhancing the openness of the economy, and ensuring fiscal consolidation while strengthening BISP programs, he added.

Under this program, the revenue mobilization actions address structural weaknesses in Pakistan’s tax system, creating fiscal space for priority social and development expenditures without raising tax rates, and lowering the government’s domestic borrowing needs.