Maps
Magazine

TRADE & ECONOMY

IMF Forecasts 2.6% Growth for Pakistan Amid Regional Tensions and Global Trade Uncertainty
IMF forecasts Pakistan’s GDP growth at 2.6% in FY2025, with a recovery to 3.6% next year. Inflation decreases, but external risks like regional conflicts and trade tensions loom large.
ND
by News Desk
2025-05-01
IMF Forecasts 2.6% Growth for Pakistan Amid Regional Tensions and Global Trade Uncertainty

The International Monetary Fund (IMF) has released its Regional Economic Outlook report, forecasting Pakistan’s GDP growth at 2.6% for the current fiscal year. This represents a decline of 0.6% from the previous growth expectations due to a general economic slowdown, compounded by regional conflicts and global trade uncertainties.

The IMF anticipates Pakistan’s growth rate to rebound in the next fiscal year, projecting a rate of 3.6%. Despite the recovery, economic growth is expected to remain sluggish, primarily due to the ongoing global trade tensions and the uncertainty surrounding international markets. These factors may significantly impact Pakistan’s exports, particularly to the United States.

The IMF also noted that while inflationary pressures have started to decrease in Pakistan, this reduction is a positive sign. Following the 2023 floods, the agricultural sector in Pakistan showed resilience, contributing positively to the economy. As a result, inflationary pressures diminished after October, leading to a reduction in interest rates by 550 basis points. The IMF predicts further interest rate cuts in the second half of the year, which is expected to help stimulate economic activity.

However, the report highlights that external economic risks remain a challenge for Pakistan and other regional economies. Conflicts in the Middle East and Central Asia are among the primary risks that could further undermine economic growth. Despite these challenges, economic activities in oil-importing countries, including Pakistan, are likely to improve gradually, though the overall growth trajectory remains slow.

Institutional reforms in Pakistan are also expected to face delays, which could hamper efforts to address long-standing structural issues within the economy.

In conclusion, while there are signs of gradual recovery, Pakistan’s economic growth remains vulnerable to global and regional uncertainties. The IMF’s report underscores the importance of continued reform efforts and policy adjustments to mitigate risks and foster a more stable economic environment.

 
Tagged:

inflation

PakistanEconomy

EconomicOutlook

GDPGrowth

IMFReport
Share News: