The International Monetary Fund (IMF) has lowered Pakistan’s growth forecast for 2025 to 2.6% from 3%, attributing this change to the impact of rising US tariffs, which are now at a 100-year high, as announced in its updated World Economic Outlook on April 22, 2025.
The report, compiled in just 10 days following US President Donald Trump’s universal tariff policy, warns that rising trade tensions will further hamper global and regional economies.
Pakistan faces a 29% US tariff on its exports, which the Pakistan Institute of Development Economics (PIDE) calls a “wake-up call for diversification.” PIDE warns of potential macroeconomic instability, job losses, and reduced foreign exchange earnings due to disrupted exports. The IMF also projects inflation at 5.1% for 2025 and 7.7% for 2026, with next year’s growth at 3.6%.
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Globally, the IMF slashed 2025 growth to 2.8%, down 0.5% from January, with trade growth cut to 1.7%. IMF chief economist Pierre-Olivier Gourinchas noted, “Trade tensions create uncertainty, tightening financial conditions.” China’s 2025 growth was revised to 4%, while the Euro Area and Japan face slower growth.
Gourinchas emphasised restoring predictability to global trade to mitigate inefficiencies, as tariffs raise costs and fragment economies.
