The International Monetary Fund (IMF) has lowered Pakistan’s GDP growth forecast for the fiscal year 2025 to 2.6%, cutting its earlier estimate of 3%. This revision comes amid growing global trade tensions and shifting international policy priorities, as highlighted in the IMF’s latest World Economic Outlook titled “A Critical Juncture Amid Policy Shifts.”
The Fund also cut Pakistan’s FY26 growth forecast to 3.6%, down from 4%, aligning with recent projections from the Asian Development Bank. The ADB had earlier lowered its FY25 estimate to 2.5%, pointing to uncertainties surrounding Pakistan’s ongoing structural reforms and fragile economic recovery.
Despite a modest 2.5% GDP growth in FY24 and 0.92% in Q1 of FY25, Pakistan’s economic momentum now seems at risk. On a positive note, the IMF sees inflation easing to 5.1% in FY25, down sharply from 23.4% in FY24, and further predicts unemployment to slightly fall to 8% in 2025.
Externally, the current account deficit is expected to shrink to just 0.1% of GDP in FY25, offering some stability. However, global concerns—including increased protectionism and geopolitical tensions—remain key threats. The IMF stressed the need for continued reforms and sound fiscal policies to ensure Pakistan’s long-term economic resilience.