ISLAMABAD: The International Monetary Fund (IMF) has revised downward GDP growth rate projection for Pakistan to three percent for fiscal year 2025 against earlier projection of 3.2 percent.
The Fund in its latest report, “World Economic Outlook (WEO) Update”, projected GDP growth for Pakistan at three percent for 2025 and four percent for 2026.
The IMF in October 2024 WEO had projected GDP growth rate for Pakistan at 3.2 per cent for fiscal year 2025 against 2.4 per cent in fiscal year 2024.
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The World Bank has estimated Pakistan GDP growth at 2.8 per cent in fiscal year 2025, while the Asian Development Bank (ADB) has projected it at three per cent.
The State Bank of Pakistan (SBP) projected real GDP growth in the range of 2.5 per cent to 3.5 per cent for fiscal year 2025.
The fund stated that global growth is projected at 3.3 per cent both in 2025 and 2026, below the historical (2000–19) average of 3.7 per cent. The forecast for 2025 is broadly unchanged from that in the October 2024 WEO, primarily on account of an upward revision in the United States offsetting downward revisions in other major economies.
Global headline inflation is expected to decline to 4.2 per cent in 2025 and to 3.5 per cent in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies. Medium-term risks to the baseline are tilted to the downside, while the near-term outlook is characterised by divergent risks.
Upside risks could lift already-robust growth in the United States in the short run, whereas, risks in other countries are on the downside amid elevated policy uncertainty. Policy-generated disruptions to the ongoing disinflation process could interrupt the pivot to easing monetary policy, with implications for fiscal sustainability and financial stability.
Managing these risks requires a keen policy focus on balancing trade-offs between inflation and real activity, rebuilding buffers, and lifting medium-term growth prospects through stepped-up structural reforms as well as stronger multilateral rules and cooperation, the report noted.
Copyright Business Recorder, 2025