The International Monetary Fund (IMF) on Tuesday lowered Pakistan’s growth forecast to only 2.6% for the current fiscal year, while at the same time the revised global economic projections in the midst of uncertainty derived from US President Donald Trump’s trading starter.

In its April 2025 World Economic Outlook Report, the IMF Pakistan’s growth estimate reduced from 3% to 2.6% and became the second major international financial institution to cut the country’s growth prospects for the 2024-25 financial year.

The revised forecast falls significantly short for the 3.6% growth target set by the Pakistani Government for the financial year. For the next financial year, the IMF Pakistan’s economic growth sees 3.6%.

However, it has improved Pakistan’s inflation view from almost 10% to 5.1%, which is also expected to remain at 7.7% in the next financial year. In another positive development, the IMF Pakistan’s deficit projection improved from almost 1% of GDP to only 0.1%.

The IMF previously expected Pakistan’s ongoing account deficit to be expanded to $ 3.7 billion, which is now expected to fall to about $ 400 million for this financial year. For the next financial year, the deficit is projected into an ongoing account of only 0.4% of the size of the economy.

The IMF releases the detailed background of its revised projections in the country’s staff level report, which will be published after the approval of the second loan tract of the IMF board next month.

Finance Minister Muhammad Aurangzeb met on Monday with IMF Managing Director Kristalina Georgieva in Washington.

A Ministry of Finance stated that Aurangzeb thanked the IMF team for reaching a staff agreement on the first review during the extended fund facility (EFF) and a new event under Resilience and Sustainability Facility (RSF).

Aurangzeb repeated the Pakistani government’s obligation to maintain the Momentum of Reform and expanded an invitation from Prime Minister Shehbaz Sharif to Georgieva to visit the country, the Ministry of Finance said.

The Minister of Finance also held a meeting with Robert Kaproth, assistant secretary of the US Ministry of Finance, and informed him of Pakistan’s improved macroeconomic indicators. He highlighted ongoing reforms in taxation, energy, privatization, state -owned companies (SOEs), pensions and debt management.

In an interview with Bloomberg in Washington, Finance Minister Aurangzeb said on Tuesday that Pakistan was looking to buy more goods from the United States and remove non-customs barriers to escape President Donald Trump’s high tariffs.

Global prospects

The IMF has given a range of 2.4% to 2.8% for global economic growth in 2025 due to uncertainty caused by President Trump’s trade policy measures.

The rapid escalation of merchant stresses has generated extremely high levels of political ambiguity, making it more difficult than usual to establish a central global growth view, the IMF report reads.

It said because of this reason, World Economic Outlook presents a number of global growth projections. The reference forecast is based on measures announced on April 4, which the IMF said would bring global growth down to 2.4%.

Post-April 9 Model-based forecasts are used to quantify the implications of the announced break and affiliated further exceptions as well as the escalating tariffs between China and the United States, economic growth is expected at 2.8%.