The International Monetary Fund (IMF) has released its World Economic Outlook Report 2026, stating that the Middle East conflict has affected global economic growth.
It said the global growth rate is expected to stand at 3.4 per cent, marking a decline of 0.2 percentage points. According to the report, Pakistan’s economic growth is also likely to remain subdued, while inflation is forecast to rise. The economy is expected to grow by 3.6 per cent in the current fiscal year, against the government’s target of 4.2 per cent. Inflation in Pakistan is projected at 7.2 per cent during the same period.
The IMF said inflation could rise further to 8.4 per cent in the next fiscal year. In the previous fiscal year, inflation was recorded at 4.5 per cent. Unemployment in Pakistan is expected to fall from 7.1 per cent to 6.9 per cent this year, with a further decline to 6.5 per cent anticipated in the following year.
The report noted that the current account deficit may reach 0.4 per cent of GDP in the ongoing fiscal year and could widen to 0.9 per cent next year. It added that the conflict has affected global energy supplies and markets, stressing the need for renewed policy priorities. The duration and intensity of the Middle East conflict will determine the future outlook.
