The International Monetary Fund (IMF) has released updated economic projections for Pakistan. The Fund forecasts a potential rise in inflation alongside moderate growth for the current fiscal year.
According to the report, Pakistan’s inflation could climb from 4.5 per cent to 6.3 per cent, with a risk of reaching 8.9 per cent by June 2026. This warning highlights a significant challenge for monetary and fiscal authorities in the coming months.
The IMF’s report also includes several key projections. It forecasts a 3.2 per cent growth rate for Pakistan’s economy in the current fiscal year (FY26). The unemployment rate is expected to improve slightly, easing from 8 per cent to 7.5 per cent.
Read: Pakistan’s SPI Records 4.15% Annual Inflation Increase
On the fiscal front, the tax-to-GDP ratio is projected to rise to 16.3 per cent in FY2026, up from 15.9 per cent. The fiscal deficit is anticipated to narrow to 4 per cent, a notable improvement from last year’s 5.4 per cent. However, the country’s public debt burden is expected to remain elevated at 69.6 per cent of GDP.
This economic assessment follows a recent positive development. On Monday, the IMF Executive Board approved an immediate $1.2 billion disbursement for Pakistan under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).
The Fund’s official statement noted Pakistan’s satisfactory progress. It acknowledged that the country implemented the necessary economic and energy-sector reforms on time, which facilitated the board’s approval.
The latest report underscores the dual challenge Pakistan now faces: managing upward price pressures while sustaining its hard-won economic growth and fiscal stability under the ongoing IMF program.
