ISLAMABAD: The International Monetary Fund has revised Pakistan’s economic outlook downward, reducing the country’s GDP growth forecast for the current fiscal year to 3.2 percent, compared to its earlier estimate of 3.6 percent issued in the October 2025 World Economic Outlook. The revision reflects ongoing economic challenges, fiscal pressures, and global uncertainties impacting developing economies like Pakistan.
According to the IMF’s latest report titled “World Economic Outlook 2026 Update: Global Economy – Steady Amid Divergent Forces,” Pakistan’s GDP growth stood at around 3 percent in 2025 and is projected to reach 3.2 percent in fiscal year 2025–26, before improving to 4.1 percent in 2027. The outlook suggests gradual recovery but highlights the need for sustained reforms to ensure long-term economic stability.
In comparison, the World Bank has projected Pakistan GDP growth to remain at 3 percent in fiscal year 2025–26, with a modest rise to 3.4 percent in fiscal year 2026–27. These projections indicate cautious optimism amid persistent structural and fiscal constraints.
Domestically, the National Accounts Committee has approved revised GDP growth of 3.09 percent for fiscal year 2024–25. The committee also reported that Pakistan’s economy recorded growth of 3.71 percent during the first quarter of fiscal year 2025–26, supported by improvements in agriculture, services, and industrial output.
On the global front, the IMF stated that world economic growth is expected to remain steady at 3.3 percent in 2026 and 3.2 percent in 2027, broadly unchanged from 2025. This stability is driven by a balance between headwinds from trade policy shifts and tailwinds from rising investment in technology, including artificial intelligence, particularly in North America and Asia.
Global inflation is projected to ease from 4.1 percent in 2025 to 3.8 percent in 2026 and 3.4 percent in 2027, with inflation returning to target levels more slowly in the United States than in other major economies.
However, risks to the global and Pakistan economic outlook remain tilted to the downside. These include rising trade tensions, geopolitical instability, high public debt, and the possibility of financial market corrections linked to overvaluation in AI-driven sectors.
The IMF emphasized that to improve medium-term growth prospects, Pakistan must focus on fiscal discipline, price stability, reducing uncertainty, and accelerating structural reforms to strengthen investor confidence and economic resilience.
