Pakistans Economic Outlook Modest Growth Ahead Amid Challenges

Pakistan’s economy is projected to grow by 3.2% in fiscal year 2025, according to the International Monetary Fund (IMF), amid declining inflation. However, this growth may have only a slight impact on reducing unemployment, which is expected to be around 8%. The IMF also forecasts a low GDP growth trajectory, predicting only 4.2% growth by fiscal year 2029, insufficient to tackle poverty given the country’s population growth rate of 2.55%.

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The current account deficit is anticipated to be 0.9% of GDP in FY2025, an improvement from last year’s deficit. While imports have been reduced to manage the deficit, this has negatively affected real growth. To achieve sustainable growth above 5%, Pakistan’s economic leaders will need to address both current and fiscal deficits. Globally, the IMF projects slow growth, with varying rates across regions, highlighting the need for ongoing policy efforts to address economic challenges.