The International Monetary Fund (IMF) cut its economic growth projection for Pakistan during fiscal year 2025. As per its latest report, Pakistan’s GDP is now projected to expand by merely 2.6%, compared to the previous projection of 3% made in January 2025.
IMF made public these developments in its latest World Economic Outlook report entitled “A Critical Juncture Amid Policy Shifts.” For 2026, the projected growth is marginally better at 3.6%.
On the positive side, the IMF forecasts that inflation in Pakistan will drop sharply. It foresees inflation declining to 5.1% in 2025, from a peak of 23.4% in 2024. In 2026, inflation is forecast at 7.7%.
Unemployment is also forecast to ease marginally. The unemployment rate is forecast to decline to 8% in 2025, from 8.3% in 2024. It may further reduce to 7.5% in 2026.
Besides, the country’s current account deficit is forecast to narrow. It can decline to -0.1% of GDP in 2025, lower than the -0.5% in 2024. It could rise somewhat to -0.4% in 2026.
These revisions indicate Pakistan’s growth is decelerating, yet there are positive signs for inflation, employment, and the trade balance.
