PK Fiscally Sustainable and Inclusive Growth DPCII

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The Second Fiscally Sustainable and Inclusive Growth Development Policy Credit (FSIG-II) Project for Pakistan will aim to achieve two broad objectives: fostering private and financial sector development to bolster economic growth, and mobilizing revenue while expanding fiscal space to priority social needs. The operation contributes to the government's strategy for accelerating economic growth, ensuring fiscal consolidation, increasing investment, and enhancing the openness of the economy to domestic and external competition. A programmatic approach is proposed to customize actions and preserve reform momentum. Moreover, lessons from other similar operations in Pakistan favor a carefully sequenced and continuous reform approach. The pillars around which this FSIG series is organized are essential prerequisites and enablers for sustained poverty reduction and shared prosperity. As the growth elasticity of Pakistan's poverty rate is among the highest in the world, by the expected impact on growth acceleration, the operation is also expected to contribute to poverty reduction and shared prosperity. And similarly, protecting the safety net and enhancing business-friendly conditions will contribute to inclusive growth and governance.