The International Monetary Fund (IMF) has revised Pakistan’s economic growth forecast to 3.5% for the fiscal year 2026-27, down from the earlier estimate of 4.1%. This adjustment is attributed to the impact of the ongoing Middle East conflict. The IMF also raised Pakistan’s inflation outlook, with an expected rate of 8.4% for the next fiscal year, up from the previous estimate of 7%.
The global lender has maintained the growth projection for the current fiscal year at 3.6%, aligning with forecasts from other global institutions. Additionally, inflation for the ongoing fiscal year is now anticipated to reach 7.2%, higher than the previous projection of 6.3%. The elevated inflation forecast may lead to pressure on Pakistan’s central bank to either maintain or tighten interest rates.
Furthermore, the IMF has adjusted Pakistan’s external outlook by more than doubling the current account deficit projection to 0.9% of GDP, approximately $5 billion, for the next fiscal year. This estimate is higher than the 0.4% projected for the current year. The report highlights Pakistan’s vulnerability to the Middle East conflict, given that the country sources nearly 90% of its energy imports from the region.
The IMF’s report also warns of broader risks to the global economy, projecting a global growth rate of 3.1% in 2026 and 3.2% in 2027, below the recent average of about 3.4%. Global inflation is expected to increase to 4.4% in 2026 before easing to 3.7% in 2027.
