The International Monetary Fund (IMF) has projected Pakistan’s gross domestic product (GDP) growth at 3.6% for the fiscal year 2025-26 (FY26), maintaining its earlier estimate despite a global slowdown. This forecast, detailed in the IMF’s October 2025 World Economic Outlook (WEO), comes as the lender anticipates a slight uptick in inflation to 6% in FY26 from 4.5% in FY25, contrasting with a global decline to 4.2%. Unemployment is expected to ease to 7.5% from 8%.
Finance Minister Muhammad Aurangzeb expressed optimism for a staff-level agreement this week on two IMF tranches totaling $1.2 billion under the $7 billion Extended Fund Facility. However, recent floods have caused Rs371 billion in losses, prompting a government revision of its growth target from 4.2% to 3.9%. Globally, growth is seen dipping to 3.2% in 2025 and 3.1% in 2026, with advanced economies at 1.5%. Analysts view the projection as cautiously positive, hinging on structural reforms and external stability. Social media reactions highlight relief over the steady outlook amid economic pressures.
