ISLAMABAD: The World Bank has revised Pakistan’s GDP growth forecast for FY 2025-26 downward from 3.1% to 2.6%, citing the impact of ongoing catastrophic floods that have disrupted agriculture and food supply chains, leading to inflation concerns.
In its latest *MENAAP Economic Update*, the Bank noted a 10% estimated decline in agricultural output in Punjab, affecting key crops such as rice, sugarcane, cotton, wheat, and maize.
Looking ahead, the World Bank projects growth to rebound to 3.4% in FY 2026-27, driven by improved agricultural output, easing inflation, and increased investment and consumption.
The report added that real GDP grew 2.7% in FY 2024-25, slightly above the previous year’s 2.5%. It also highlighted potential export gains from Pakistan’s new five-year tariff reform plan, which aims to halve existing tariffs.
However, inflation is expected to rise again through 2027 due to ongoing supply disruptions. Pakistan’s exports may also decline by up to 1.5%, the report warned.
The Bank emphasized that removing barriers to female labor force participation could boost Pakistan’s per capita GDP by up to 30%. Poverty, which fell significantly between 2011 and 2018, is now projected to have stalled due to recent economic shocks and disasters.
Despite having one of the region's highest fertility rates (3.5%), Pakistan is expected to reach below-replacement fertility within a generation.
ISLAMABAD: The World Bank has revised Pakistan’s GDP growth forecast for FY 2025-26 downward from 3.1% to 2.6%, citing the impact of ongoing catastrophic floods that have disrupted agriculture and food supply chains, leading to inflation concerns.The MENAAP region as a whole is forecast to grow at 2.8% in 2025 and 3.3% in 2026.
