IMF Cuts Pakistan’s 2025 Growth Forecast to 2.6 percent

The International Monetary Fund (IMF) has lowered Pakistan’s GDP growth forecast for fiscal year 2025 to 2.6 percent, down from its earlier estimate of 3 percent made in January 2025. The projection for 2026 remains slightly more optimistic at 3.6 percent. In its latest World Economic Outlook report titled “A Critical Juncture Amid Policy Shifts”, the IMF also revised inflation expectations downward—projecting a sharp drop to 5.1 percent in FY2025 and 7.7 percent in FY2026, from a steep 23.4 percent in FY2024. Unemployment is expected to gradually decline, reaching 8 percent in 2025 from 8.3 percent in 2024, with a further dip to 7.5 percent projected for 2026. The country’s current account deficit is forecast to narrow to -0.1 percent of GDP in 2025, compared to -0.5 percent in 2024, with a slight widening to -0.4 percent in 2026. Government net borrowing is projected to ease, coming down to -5.6 percent of GDP in 2025 from -6.8 percent in 2024.