ISLAMABAD: Pakistan’s fragile economic stabilization is at risk from fresh floods that threaten to undo hard-won gains, the World Bank said in its Pakistan Development Update released this week, warning that growth will slow to 3 percent in FY 2026 and inflation will rise to 7.2 percent.

After a year of recovery marked by a sharp decline in inflation to 4.5 percent, a record primary surplus of 2.4 percent of GDP, and the first current-account surplus in two decades, the Bank cautioned that such growth was “insufficient to materially improve living standards,” particularly amid job market pressures.

The improvements reflect reforms under Pakistan’s $7 billion IMF Extended Fund Facility, which has helped narrow fiscal and external deficits through tighter policy and a market-based exchange rate.

“Recent floods threaten these gains, cutting projected growth to 3 percent in FY 2026 and raising inflation to 7.2 percent, which is insufficient for jobs and living standards,” the World Bank said in its report titled ‘Staying the Course for Growth and Jobs.’

The report said Pakistan’s labor force continues to expand by around 1.6 million workers each year, while limited private investment and weak productivity growth prevent the economy from creating enough jobs.

Exports remain another major constraint, accounting for only 10 percent of GDP — roughly half Bangladesh’s share — highlighting Pakistan’s low participation in global value chains. The Bank said high tariffs, complex customs procedures and standards compliance costs continue to “raise trade costs and reduce competitiveness.”

The World Bank backed Pakistan’s ongoing tariff reform plan, which aims to halve import duties by 2030 and, if fully implemented, could raise exports by 14 percent, increase GDP by 0.2 percent, and create about 300,000 jobs.

It called on Pakistan to sustain reforms that have restored short-term stability, including maintaining a market-determined exchange rate, broadening the tax base, improving customs efficiency, and advancing privatization to crowd in private investment.

“Staying the course on structural reforms will be critical to consolidate stability and generate the growth and jobs needed to lift living standards,” the report said.

ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) on Tuesday announced the seizure of 25 kilograms of silver worth about Rs 12 million ($40,000) from a passenger bus at the Mochko Check Post in Karachi, in an operation aimed at cracking down on precious-metal smuggling.

The consignment was discovered during an inspection at the Mochko Check Post after officers of the Anti-Smuggling Organisation found silver bars hidden in a passenger’s luggage. The suspect failed to produce import or purchase documents, confirming the consignment’s illegal origin, according to the FBR.

The Mochko Check Post, located in Karachi’s Keamari district, is reportedly used by criminal networks to smuggle goods, narcotics and weapons into the city.

“The seized silver has been taken into custody under the Customs Act 1969, and the passenger has been detained,” the FBR said in a post on X. “Further investigation is underway to trace the source, route and intended recipients of the smuggled goods and to identify accomplices involved.”

Rising global silver prices, driven by renewed investor demand and strong industrial use in solar panels and electronics, have made the metal a lucrative target for smugglers in Pakistan.

Such trafficking is not confined to international borders, with smugglers increasingly using passenger buses and inter-provincial routes to move untaxed silver and gold within the country.

The FBR said enforcement operations would “continue with full vigour” to curb smuggling and ensure compliance with customs laws across all entry routes and checkpoints.