The International Monetary Fund (IMF) has revised Pakistan’s economic outlook, lowering its projected Gross Domestic Product (GDP) growth rate for 2025 to 3%, a reduction from the 3.2% forecast made three months earlier.
This adjustment was detailed in the IMF’s “World Economic Outlook Update: Global Growth – Divergent and Uncertain,” which presented a broader global economic assessment.
According to the revised projections, Pakistan’s GDP growth is expected to stabilize at 4% in 2026. The IMF did not specify the reasons for the latest downgrade, which highlights ongoing economic challenges in the country.
Notably, this revision aligns with a similar forecast issued by the Asian Development Bank (ADB) last month, which also lowered Pakistan’s growth projection for the fiscal year 2024-25 to 3%, up slightly from the previously anticipated 2.8%. Both organizations acknowledged the challenges facing Pakistan’s economy but maintained a cautiously optimistic outlook for the medium term.
Global Economic Growth Forecasts
On a global scale, the IMF projects growth rates of 3.3% for both 2025 and 2026, which remain below the historical average of 3.7%.
Pierre-Olivier Gourinchas, the IMF’s chief economist, emphasized the uneven nature of global economic recovery, stating that “the global economy continues to face diverging growth patterns,” with the United States performing better than expected while other major economies experience slower growth.
Inflationary pressures are expected to ease globally over the coming years. The IMF forecasts inflation to drop to 4.2% in 2025 and 3.5% in 2026, although it cautioned that inflation remains persistently high in some regions despite an overall trend of disinflation.
Additionally, the IMF highlighted a projected 2.6% decrease in energy commodity prices in 2025, while non-fuel commodity prices are expected to rise by 2.5%, driven largely by unfavourable weather conditions impacting key producers.
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Regional and Major Economies’ Growth Projections
The IMF’s latest report paints a varied picture of growth across regions and major economies.
- United States: GDP growth for 2025 has been revised upward to 2.7%, a 0.5 percentage-point increase attributed to stronger domestic demand. However, U.S. growth is expected to slow to 2.1% in 2026.
- Euro Area: The region’s growth forecast for 2025 has been downgraded to 1%, down from an earlier estimate of 1.2%, reflecting weaker momentum in manufacturing and uncertainties around political and policy issues. Growth is expected to recover to 1.4% in 2026.
- United Kingdom: Modest growth is forecast, with GDP expected to increase by 1.6% in 2025 and 1.5% in 2026.
- China: GDP growth is projected at 4.6% in 2025 and 4.5% in 2026. The IMF urged China to stimulate domestic demand to sustain its economic growth.
- India: The country continues to exhibit robust economic performance, with GDP growth projected at 6.5% for both 2025 and 2026, reflecting its strong potential.
As highlighted by the IMF, the global economy remains in a phase of uncertainty, with regional disparities in growth patterns.
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