The objective of this report is to update the Government of Pakistan, think-tanks andresearchers, the public and the World Bank’s senior management on the state of the Pakistaneconomy and its outlook, together with the structural reforms it requires and the developmentchallenges it faces. The report begins with a chapter on economic developments, with sectionson growth, fiscal policy, public debt, the external sector, monetary developments and inflation,and the financial sector. The second chapter provides a medium-term macroeconomicoutlook and describes risks faced and upcoming challenges, including structural reformneeds. The third chapter concludes by stressing the importance of creating a skilled laborforce that is more productive and better able to adopt and adapt to new technologies—thecore of Pakistan’s growth path.