Islamabad: The World Bank has lowered Pakistan’s economic growth forecast for the current fiscal year. It now expects growth at 3%. Previously, the government aimed for 4.2%. This revision reflects challenges in agriculture, trade, and recovery from recent floods.
The report predicts that Pakistan’s growth could rise to 3.4% in the 2026-27 fiscal year. Recovery efforts in agriculture and reconstruction projects may support the economy. Additionally, industrial activity and bank lending are showing signs of improvement, which could boost overall economic performance.
Read more: Pakistan’s GDP grows 3.71% in Q1 FY2026
Inflation is expected to decrease gradually due to lower food prices. Despite recent cuts in interest rates, monetary policy remains cautious. The central bank continues careful measures to maintain financial stability and prevent economic shocks.
However, the World Bank warned that higher U.S. tariffs could hurt exports. Rising imports may widen the current account deficit. Normalization of remittances might increase external financial pressure, which could affect Pakistan’s balance of payments.
Read more: Pakistan’s economy signals sustained recovery
Globally, the report expects the world economy to grow 2.6% in 2026 and 2.7% in 2027. Pakistan’s recovery depends on flood relief, industrial growth, and stable trade. The report emphasizes careful planning to sustain long-term economic stability.