IMF expects Pakistan’s GDP to grow at 3.6pc in FY26

ISLAMABAD: The International Monetary Fund (IMF) has projected Pakistan’s GDP growth rate at 3.6 percent for the current fiscal year (FY2025-26), which falls short of the 4.2 percent target set by the government.

According to the IMF’s World Economic Outlook Update released from its Washington headquarters on Tuesday, Pakistan’s GDP growth for FY2024-25 stood at 2.7 percent. For FY2025-26, the Fund expects moderate improvement, projecting growth at 3.6 percent—still lower than the government’s official forecast.

On the global front, the IMF estimates world economic growth at 3 percent in 2025 and 3.1 percent in 2026. These projections are slightly higher than those in the April 2025 Outlook— by 0.2 and 0.1 percentage points, respectively—reflecting stronger-than-anticipated factors such as improved financial conditions, fiscal expansion in major economies and a weaker US dollar.

The Fund warned that any rebound in tariff rates, rising fiscal deficits, geopolitical tensions, or prolonged uncertainty could dampen global growth prospects. Conversely, successful trade negotiations and policy stability could provide an upside to growth. The IMF stressed that to support recovery and resilience, countries must prioritize predictability, confidence and structural reforms, while safeguarding financial and price stability.