The International Monetary Fund (IMF) has projected that Pakistan’s inflation will rise to 6% in the fiscal year 2025–26. The projection was shared in the IMF’s latest World Economic Outlook (WEO) report released on Tuesday.
According to the IMF report, Pakistan’s inflation is expected to increase from 4.5% in FY2025 to 6% in the current fiscal year. This trend runs opposite to the global pattern, where inflation is forecasted to decline. Globally, the IMF expects inflation to fall to 4.2% in 2025 and further ease to 3.7% in 2026.
The IMF also maintained its earlier forecast for Pakistan’s economic growth at 3.6% for FY2025–26. Despite the rise in inflation, the Fund expects moderate growth, supported by ongoing reforms and stabilization measures. On the global front, the IMF anticipates economic growth to slow down from 3.3% in 2024 to 3.1% in 2026 due to weaker demand and tighter financial conditions.
In terms of employment, the IMF predicts Pakistan’s unemployment rate will fall to 7.5% in the current fiscal year, compared to 8% last year. This indicates a slight improvement in the job market as the economy stabilizes.
However, the IMF cautioned that its projections do not yet include the impact of recent floods in Pakistan. The report noted that the full extent of the damage is still being evaluated. Earlier this month, Pakistan informed the IMF that the floods had caused losses of approximately Rs. 371 billion.
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Following these losses, the government revised its GDP growth target downward from 4.2% to 3.9%. Analysts believe that while the IMF’s projections show cautious optimism, inflationary pressure and climate-related challenges remain key risks for Pakistan’s economy in the coming months.
