The International Monetary Fund (IMF) has projected Pakistan’s economy to grow by 3.5 per cent in fiscal year 2026-27. It also expects inflation to rise to 9.9 per cent, keeping price pressures close to double digits.
In its latest World Economic Outlook, the IMF forecast growth below the government’s 4pc target. The projection also falls short of the World Bank’s 3.8pc forecast issued last month. Pakistan recorded growth of 3.6pc last year, compared with 3.2pc in fiscal year 2024-25.
The fund expects Pakistan’s current account to move from a surplus to a deficit. It projected the deficit at 1pc of gross domestic product in FY27, following a surplus of 0.5pc in FY2025. Inflation is also expected to increase from 7.1pc last year to 9.9pc during the current fiscal year.
However, the IMF expects unemployment to decline to 6.5pc this year. The rate stood at 6.9pc last year and 7.1pc a year earlier. The report did not explain the expected improvement despite its projections for higher inflation and a wider current account deficit.
The global economy remains resilient, but that resilience is becoming more fragile and more uneven. Growth is projected at 3.1% in 2026 and 3.4% in 2027, while inflation is expected to reach 4.7%, driven largely by higher energy and food prices. Read the IMF’s latest analysis: https://t.co/yoil3EB47M
— IMF (@IMFNews) October 13, 2026
Globally, the IMF expects economic growth to slow to 3.1pc in 2026 before recovering to 3.4pc in 2027. Global headline inflation is projected to reach 4.7pc in 2026 before easing to 4.1pc next year. The fund attributed economic resilience partly to technological investment and adjustments that helped countries absorb geopolitical disruptions.
Read more: IMF agreement clears path for $1.21bn Pakistan funding
The IMF warned that energy-importing countries with limited links to technology supply chains face particularly difficult conditions. Pakistan remains exposed because it depends on Gulf energy imports, remittances and regional financial support. Further conflict in the Middle East could increase energy and food prices, intensify inflation and weaken external balances.
The fund also identified renewed trade tensions, fiscal vulnerabilities and uncertainty surrounding artificial intelligence investment as risks to global growth. It advised governments to strengthen public finances and protect vulnerable households through temporary, targeted assistance. Meanwhile, Finance Minister Muhammad Aurangzeb said the government expected growth above 4pc this fiscal year despite elevated oil prices.