The International Monetary Fund (IMF) has projected Pakistan’s economy will grow by 3.6% in fiscal year 2025–26, falling short of the government’s target of 4.2%, according to the Fund’s latest World Economic Outlook Update titled “Global Economy: Tenuous Resilience amid Persistent Uncertainty.”
In a modest upward revision, the IMF also raised its GDP growth estimate for the recently concluded fiscal year 2024–25 by 0.1 percentage point, bringing it to 2.7%. This aligns closely with the Finance Division’s own estimate, published in its June 2025 Monthly Economic Outlook, which placed real GDP growth for FY25 at 2.68%.
Meanwhile, the Finance Ministry has projected July 2025 inflation to range between 3.5% and 4.5%, citing easing price pressures.
Other international institutions have also issued cautious growth projections for Pakistan. The World Bank expects GDP growth to reach 3.1% in FY26, while the Asian Development Bank (ADB) forecasts a slightly lower 3% for the same year. In its latest update, ADB also revised Pakistan’s FY25 growth estimate to 2.7%, up from its previous forecast of 2.5%.
Globally, the IMF expects world economic growth to hit 3% in 2025 and 3.1% in 2026, slightly higher than previous projections. The 2025 forecast is 0.2 percentage points higher than the April 2025 WEO estimate, while the 2026 figure is up by 0.1 percentage point.
According to the IMF, the revised global outlook reflects “stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective U.S. tariff rates than announced in April; an improvement in financial conditions, including due to a weaker U.S. dollar; and fiscal expansion in some major jurisdictions.”
On inflation, the report projects global headline inflation to decline to 4.2% in 2025 and 3.6% in 2026, a trajectory broadly consistent with April’s forecasts. However, the Fund noted key disparities across economies, warning that inflation in the United States is likely to remain above target, while pressures in other large economies will be more subdued.
The IMF also reiterated that risks to the global outlook remain skewed to the downside, echoing concerns flagged in its April 2025 report.
