The International Monetary Fund (IMF) has lowered Pakistan’s economic growth forecast for the current fiscal year to 2.6 per cent, down from its earlier estimate of 3 per cent. This marks a significant drop from the government’s target of 3.6 per cent.
The revision comes as the IMF updates its global outlook, which has been impacted by ongoing trade tensions, especially those related to US policies under President Trump.
Despite the lower growth forecast, the IMF has shared some positive signs. It now expects inflation in Pakistan to be around 5.1 per cent, a major improvement from the earlier estimate of nearly 10 per cent. Inflation for the next fiscal year is projected to be 7.7 per cent.
The IMF has also revised Pakistan’s current account deficit forecast. It had earlier expected the deficit to widen to $3.7 billion, but it now believes it will be much smaller—around $400 million, or 0.1 per cent of GDP. For the next fiscal year, the deficit is expected to be just 0.4 per cent of GDP.
The IMF will share more details in a staff-level report after its board approves the next loan installment. Meanwhile, Finance Minister Muhammad Aurangzeb met IMF Managing Director Kristalina Georgieva in Washington on Monday to discuss Pakistan’s economic progress and approves the next loan installment. Meanwhile, Finance Minister Muhammad Aurangzeb met IMF head Kristalina Georgieva in Washington this week.
