The International Monetary Fund (IMF) has projected Pakistan’s GDP growth rate to increase to 3.2% for the fiscal year 2025, up from 2.4% in fiscal year 2024. This forecast was detailed in the IMF’s latest “World Economic Outlook (WEO): Policy Pivot, Rising Threats” report, released on Tuesday.
The World Bank has also provided its estimates, projecting Pakistan’s GDP growth at 2.8% for fiscal year 2025, slightly higher than the 2.5% forecast for 2024, marking it as the lowest in the region. Similarly, the Asian Development Bank (ADB) has maintained its GDP growth projection for Pakistan at 2.8%.
The IMF report anticipates a significant reduction in Pakistan’s inflation rate, projecting it to fall to 9.5% in 2025 from 23.4% in 2024. However, consumer prices at the end of 2025 are expected to be 10.6%, down from 12.6% in 2024.
The current account balance is forecasted to be negative 0.9% for 2025, compared to negative 0.2% in 2024. Additionally, the IMF projects a decrease in unemployment in Pakistan, with the rate expected to drop to 7.5% in 2025 from 8% in 2024.
Globally, the report notes that growth is expected to remain stable yet modest, with projections of 3.2% for both 2024 and 2025. This outlook remains largely unchanged from previous updates, despite underlying shifts. Upgrades to the U.S. forecast have offset downgrades for other advanced economies, particularly in Europe.
In emerging markets and developing economies, factors such as disruptions in commodity production and shipping, conflicts, civil unrest, and extreme weather have led to downward revisions for the Middle East, Central Asia, and sub-Saharan Africa. However, these have been balanced by upgrades in emerging Asia, where increased demand for semiconductors and electronics, fueled by investments in artificial intelligence, has supported growth.
The global growth forecast for five years from now stands at 3.1%, which is considered mediocre compared to the pre-pandemic average. The report highlights persistent structural challenges, such as population aging and weak productivity, as factors limiting potential growth in many economies.
