The International Monetary Fund (IMF) expects Pakistan’s economy to grow by 3.5 percent in fiscal year 2026-27, indicating that the country is likely to fall short of the federal government’s 4 percent growth target despite a gradual improvement in economic activity.
In its latest World Economic Outlook Update released on Wednesday, the IMF also left its growth forecast for fiscal year 2025-26 unchanged at 3.6 percent. The projections remain the same as those published in the Fund’s April 2026 World Economic Outlook.
According to the IMF, Pakistan’s economy expanded by 3.2 percent in 2025 and is projected to grow by 3.6 percent in 2026 before easing slightly to 3.5 percent in 2027.
The Fund also outlined its latest global economic outlook, projecting world growth at 3.0 percent in 2026 and 3.4 percent in 2027. These forecasts remain broadly unchanged from its April assessment.
The report said the global outlook continues to vary across regions. Ongoing conflict is placing pressure on energy importing and vulnerable economies, while rising demand driven by artificial intelligence is supporting growth in countries that are integrated into the global technology supply chain.
The IMF added that global disinflation has stalled, although risks are now more balanced than they were in April. However, it warned that renewed geopolitical conflict and financial market repricing continue to pose downside risks, urging policymakers to maintain price stability, rebuild fiscal buffers, and strengthen economic resilience.
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