The International Monetary Fund (IMF) has revised downwards Pakistan’s projected GDP growth for the ongoing fiscal year to 2.6% from its earlier estimate of 3 percent due to mounting global uncertainties and downward risks.
In its latest World Economic Outlook (WEO) report, the IMF projected Pakistan’s GDP growth for FY25 at 2.6% and 3.6% for FY26. This is a 0.4% decline from January’s WEO report, which had projected Pakistan’s FY25 GDP growth at 3% and FY26 growth at 4%.
According to the report, Pakistan’s unemployment is projected to decrease to 8 percent in 2025 and 7.5% in 2026. The country’s current account balance is projected at -0.1% for 2025 and -0.4% for 2026.
Globally, reads the WEO report, the global economy had appeared to stabilize after enduring a prolonged and unprecedented series of shocks. However, it noted, the landscape has changed as governments around the world reorder policy priorities, with uncertainties climbing to new highs.
The report has revised downwards forecasts for global growth in light of effective tariff rates climbing to levels not seen in a century and a highly unpredictable environment. It also said it expected global headline inflation to decline at a slightly slower pace than what was expected in January. It further said intensifying downside risks dominate the outlook amidst escalating trade tensions and financial market adjustments. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions, it noted.
Any further movement on the trade war between China and the U.S., and the resulting heightened trade policy uncertainty, may further hinder both short-term and long-term growth prospects, it warned. Scaling back international cooperation could jeopardize progress toward a more resilient global economy, it added.