IMF sees Pakistan's inflation rising to 9.9% in 2027 as growth slows

Pakistan’s inflation rate is projected to rise to 9.9% in 2027, while economic growth is expected to ease to 3.5%, according to data released by the International Monetary Fund’s (IMF) World Economic Outlook (WEO) released on Tuesday.

The IMF data showed inflation at 7.1% in 2026, up from 4.5% in 2025. Pakistan’s gross domestic product (GDP) growth is projected at 3.6% in 2026, compared with 3.2% in 2025, before moderating to 3.5% in 2027.

According to the WEO, Pakistan’s current account balance is projected to remain flat in 2026 before slipping into a deficit equivalent to 1% of GDP in 2027, compared with a surplus of 0.5% of GDP in 2025.

Moreover, the country’s unemployment rate is forecast to decline to 6.9% in 2026 and 6.5% in 2027, from 7.1% in 2025, the data showed.

As per the report, global growth is projected to slow to 3.1% in 2026 and rebound to 3.4% in 2027. Global headline inflation is projected to rise notably to 4.7% in 2026 before easing to 4.1% in 2027.

The outlook noted that the global economy is again proving resilient, but unevenly so and with rapidly narrowing margins of adjustment in the near term.

“Activity in the first half of 2026 held up better than expected despite the dragging war in the Middle East and continuing strains from trade tensions.

“The technology cycle has provided a demand impulse, driven by strong investment in artificial intelligence (AI).

“The interaction of these forces—geopolitics and technology—has produced a split global economy: Favourable terms of trade or technology-related exports and investment give some countries a cushion, whereas others face higher import bills and weaker demand.

“Use of buffers and adaptability have helped economies weather the negative shocks so far. Flexible supply responses, rerouting of shipments, inventory drawdowns, fiscal support measures, and lower energy intensity than in previous decades have helped contain the hit to activity from the war.”

According to the outlook, energy-importing economies outside the technology value chain face the most difficult outlook. But the margins of adjustment that helped resilience are not limitless, and risks are skewed to the downside.

Further escalation in conflicts, a reassessment of expectations surrounding AI, renewed trade tensions, and fiscal vulnerabilities could weaken growth. On the upside, stronger momentum in AI investment and productivity gains from AI or a sustained easing of geopolitical and trade tensions could strengthen growth, read the report.