IMF projects Pakistan’s GDP growth at 3.6% for FY26, below govt target of 4.2%

ISLAMABAD: The International Monetary Fund (IMF) has projected gross domestic product (GDP) growth rate for Pakistan at 3.6% for the current fiscal year 2025-26 against the government target of 4.2%.

The fund in its latest report, ‘World Economic Outlook Update, Global Economy: Tenuous Resilience amid Persistent Uncertainty’, upgraded GDP growth estimates for the last fiscal year 2024-25 by 0.1% to 2.7%.

Finance Division in its monthly economic outlook for June 2025 claimed that real GDP grew by 2.68% in the fiscal year 2024-25.

Finance ministry projects July inflation at 3.5-4.5% as price pressures ease

The World Bank has projected GDP growth rate for Pakistan at 3.1% for the fiscal year 2026 and the Asian Development Bank (ADB) at 3% for FY26. In its latest report, ADB revised Pakistan’s GDP growth estimate for fiscal year 2025 slightly upward to 2.7% from its earlier projection of 2.5%.

IMF stated that global growth is projected at 3% for 2025 and 3.1% in 2026. The forecast for 2025 is 0.2 percentage point higher than the reference forecast of the April 2025 WEO and 0.1 percentage point higher for 2026.

“This reflects stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions,” it added.

The report further stated that global headline inflation is expected to fall to 4.2% in 2025 and 3.6% in 2026, a path similar to the one projected in April.

The overall picture hides notable cross-country differences, with forecasts predicting inflation will remain above target in the United States and be more subdued in other large economies. Risks to the outlook are tilted to the downside, as they were in the April 2025 World Economic Outlook.