The International Monetary Fund (IMF) has projected an economic recovery in Pakistan, citing improved agricultural output following the devastating floods. The forecast was made in the IMF’s latest Regional Economic Outlook for the Middle East and Central Asia.

According to the report, public financing needs for Pakistan and MENA (Middle East and North Africa) countries are expected to total $263 billion in 2025. The report also warned of a significant slowdown in growth among non-GCC (Gulf Cooperation Council) oil exporters in the coming year.

The outlook highlighted that Pakistan’s economy is on a recovery path, supported by a rebound in the agricultural sector. It noted that to control the fiscal deficit, Pakistan has raised its interest rate by 550 basis points.

The IMF also outlined the severe economic impact of ongoing conflicts in countries such as Sudan, Gaza, Lebanon, Syria, and Yemen. In Sudan, 4 million people have been displaced; Gaza has seen 48,000 deaths; and Lebanon reported 4,300 fatalities. Syria’s economy has shrunk by 60%, while inflation in Lebanon remains persistently high.

IMF lowers Pakistan’s GDP growth projection to 2.6% for FY 2025

Meanwhile, Egypt and Jordan are facing downward pressure on growth due to the spillover effects of regional unrest. For oil-importing nations in the Middle East, growth is projected to reach 3.4% in 2025.

The IMF called for targeted reforms across the region to mitigate external shocks, stabilise economies, and address increasing financing needs.