The International Monetary Fund (IMF) has released its latest World Economic Outlook Update, projecting Pakistan’s economic growth rate at 3.6 percent for the current fiscal year—significantly below the government’s target of 4.2 percent.
The global lender projected that Pakistan’s economy will grow faster than the expected global average of 3 percent for 2025 and 3.1 percent in 2026, but this pace is still insufficient to meet domestic expectations and development goals.
The IMF attributed the lower growth forecast to a combination of domestic and international challenges. The report highlighted that while global inflation is on a declining trajectory and financial conditions are gradually improving, risks to global growth persist due to geopolitical tensions, potential high tariffs, and growing policy uncertainty.
“These factors could negatively impact emerging markets such as Pakistan,” the report warned, stressing that restoring investor confidence and creating favourable financial and policy conditions should be prioritised.
The Fund’s outlook comes at a time when Pakistan is undergoing economic reforms under the guidelines of the IMF-supported programme. Though some macroeconomic indicators have shown signs of improvement, including inflation control and a narrowing current account deficit, growth remains fragile and vulnerable to external shocks.
The report further underscored that geopolitical risks—particularly conflicts in Europe and the Middle East—continue to pose serious threats to global economic stability and supply chains.
“Despite global headwinds, Pakistan’s growth projection still outpaces that of the broader global economy,” the report noted, suggesting a relative improvement in Pakistan’s economic outlook compared to previous years.
The IMF called on governments, especially in emerging economies, to focus on policies that rebuild fiscal buffers, ensure financial resilience, and support inclusive growth amid an evolving global landscape.
