The International Monetary Fund (IMF) has projected Pakistan’s GDP growth at 3.6% for the fiscal year 2025–26, which falls short of the government’s target of 4.2%, as per the IMF’s World Economic Outlook Update released on Tuesday from Washington.
For the current fiscal year 2024–25, the IMF estimates Pakistan’s growth at 2.7%, with a modest improvement expected in the following year. Despite the upward trend, the Fund’s forecast for FY26 remains below official expectations, signaling a cautious outlook on the country’s economic trajectory.
On the global scale, the IMF anticipates economic growth of 3% in 2025 and 3.1% in 2026. These figures represent a slight increase from the April 2025 forecast up by 0.2 and 0.1 percentage points, respectively. The revised outlook attributes the improvement to factors like eased financial conditions, fiscal stimulus in major economies, and a weaker US dollar.
However, the IMF also warned of potential risks that could undermine growth, including rising tariffs, ballooning fiscal deficits, geopolitical tensions, and prolonged policy uncertainty. On the upside, successful trade negotiations, policy continuity, and implementation of structural reforms could positively influence economic outcomes.
To promote sustained recovery and resilience, the IMF advised all countries including Pakistan to focus on building confidence, ensuring policy predictability, and advancing structural reforms while maintaining financial discipline and price stability.
The projections come amid ongoing policy adjustments by Pakistan under the IMF’s guidance, aimed at stabilizing the economy and restoring investor confidence following years of economic volatility.
