IMF lowers Pakistan’s growth forecast to 2.6%

The International Monetary Fund has projected Pakistan’s economy will grow by 2.6% in the current fiscal year (FY25), significantly below the government’s estimate of 3.5%.

The forecast was released Tuesday night in the IMF’s latest World Economic Outlook report, which assessed global economic activity and flagged concerns over trade tensions stemming from U.S. President Donald Trump’s tariff measures.

The IMF had previously estimated Pakistan’s growth at 3%, but the latest revision brings that figure down to 2.6%. The government, meanwhile, maintained a more optimistic forecast of 3.5% when announcing the federal budget.

For the next fiscal year, the IMF projects a growth rate of 3.6%.

In a more positive development, the IMF revised downward its projections for two key indicators: inflation and the current account deficit.

Inflation is now expected to average 6.5% this fiscal year, down from the earlier forecast of 10%. For the next year, the IMF expects inflation to remain in single digits, around 7.1%.

The current account deficit is also expected to shrink sharply. The IMF now estimates that it will be approximately $400 million, a significant decrease from the previous forecast of $3.7 billion. That would bring the deficit to just 0.1% of gross domestic product, compared to the earlier estimate of 1%.