The International Monetary Fund (IMF) has revised its GDP growth rate projection for Pakistan downward by 0.4%, setting it at 2.6% for the fiscal year 2025, compared to the earlier estimate of 3% made in January 2025.

In its latest report, titled “World Economic Outlook (WEO): A Critical Juncture Amid Policy Shifts,” the IMF also projected a growth rate of 3.6% for Pakistan in 2026. The earlier January report had forecasted a growth rate of 3% for 2025 and 4% for 2026.

Additionally, the IMF has lowered its inflation rate projection to 5.1% for the current fiscal year and 7.7% for fiscal year 2026, down from 23.4% in fiscal year 2024.

Unemployment in Pakistan is expected to decrease to 8% in 2025, from 8.3% in 2024, with a further decline to 7.5% projected for 2026.

The current account balance is anticipated to be negative 0.1% for 2025, an improvement from negative 0.5% in 2024, with a slightly worse projection of negative 0.4% for 2026.

The general government net lending/borrowing is projected at negative 5.6% of GDP for 2025, compared to negative 6.8% for 2024.

In related news, the Asian Development Bank (ADB) has also revised its GDP growth forecast for Pakistan for fiscal year 2025 down to 2.5%, adjusting it from an earlier projection of 3% in December 2024.

The ADB emphasized that the country’s economic outlook largely depends on the success of ongoing reforms and noted that its forecasts were finalized before the announcement of new tariffs by the US administration on April 2.

The World Bank has postponed the release of its Pakistan Development Outlook, originally scheduled for April 9, to reassess its projections in light of recent developments.

The IMF report highlighted that the global economy appears to have stabilized after enduring a series of unprecedented shocks, but growth rates remain modest.

It warned that the landscape has changed as governments worldwide shift policy priorities, leading to increased uncertainties.

Global growth forecasts have been notably revised downward compared to the January 2025 WEO Update, reflecting tariff rates not seen in a century and an unpredictable environment.

The report also indicated that global headline inflation is expected to decline at a slower pace than previously anticipated.

The IMF cautioned that intensifying risks, including escalating trade tensions and financial market adjustments, could hinder both short-term and long-term growth prospects.

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