Islamabad, October 14, 2025 — The International Monetary Fund (IMF) has forecast Pakistan’s gross domestic product (GDP) growth at 3.6 percent for fiscal year 2026, reflecting a steady improvement from the 2.7 percent growth recorded in FY2025.
According to the IMF’s latest World Economic Outlook (WEO) report released on Tuesday, Pakistan’s unemployment rate is expected to fall to 7.5 percent in FY2026 from 8 percent in the previous year. The report attributes this growth momentum to improving macroeconomic stability, ongoing policy reforms, and gradual recovery in investment and trade activities.
The IMF also highlighted global economic challenges, noting that trade policy shifts and uncertainty earlier in the year had weighed on worldwide growth prospects. In its April 2025 outlook, the Fund had revised the global growth forecast downward to 2.8 percent due to rising tariffs and trade restrictions. However, subsequent policy adjustments and tariff reductions led to a modest upward revision to 3.0 percent in July.
Globally, the IMF expects economic expansion to slow slightly—from 3.3 percent in 2024 to 3.2 percent in 2025, and further to 3.1 percent in 2026. Despite the slowdown, the Fund described the outlook as relatively stable, supported by resilient demand in emerging economies and moderating inflation pressures.
Advanced economies are projected to grow at about 1.5 percent in 2025–26, while the United States is forecast to post 2.0 percent growth. Emerging and developing markets are expected to maintain a growth rate above 4.0 percent, supported by stronger domestic demand and recovery in trade volumes.
The IMF’s report also anticipates that global inflation will ease from 4.2 percent in 2025 to 3.7 percent in 2026, with world trade volumes rising by an average of 2.9 percent over the next two years, despite continued trade fragmentation.