ISLAMABAD: The International Monetary Fund (IMF) has projected Pakistan’s GDP growth rate at 3.6 percent during the 2025-26 fiscal year against the government target of 4.2 percent.
The Fund, however, clarified that its projections do not yet reflect the impact of the 2025 monsoon floods, as the impact of the disaster has yet to be assessed.
In its report titled “World Economic Outlook, Global Economy in Flux, Prospects Remain Dim”, the IMF reported a 2.7 percent GDP growth rate for Pakistan in 2024-25 against the government’s revised estimates of 3.07 percent, which was earlier estimated at 2.68 percent.
IMF, Pakistan mull cutting GDP growth forecast to 3.5pc
The Fund has projected an increase in the inflation rate for Pakistan while saying that consumer prices are projected at six percent for 2026 against 4.5 percent in 2025. The Fund has projected a decline in unemployment for Pakistan from 8 percent in 2025 to 7.5 percent in 2026. Current account balance is projected at (-)0.4 percent for 2026 against 0.5 percent in 2025.
The general government net lending/borrowing is projected at (-)4.1 percent of GDP for 2026, compared to (-) 5.3 percent of GDP in 2025.
The global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025—such as front-loading—are fading.
The IMF said that as a result, global growth projections in the latest WEO are revised upward relative to the April 2025 WEO but continue to mark a downward revision relative to the pre-policy-shift forecasts.
Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies growing around 1.5 percent and emerging market and developing economies just above 4 percent. Inflation is projected to continue to decline globally, though with variation across countries: above target in the United States—with risks tilted to the upside—and subdued elsewhere.
Risks are tilted to the downside. Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability.
Policymakers are urged to restore confidence through credible, transparent, and sustainable policies. Trade diplomacy should be paired with macroeconomic adjustment. Fiscal buffers should be rebuilt. Central bank independence should be preserved. Efforts on structural reforms should be redoubled, it added.
Copyright Business Recorder, 2025
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