The International Monetary Fund (IMF) has revised Pakistan’s economic outlook, downgrading its projected gross domestic product (GDP) growth for 2025 to 3%, down from 3.2% expected just three months ago.
The adjustment comes amid a broader global economic assessment presented in the IMF’s “World Economic Outlook Update: Global Growth – Divergent and Uncertain.”
The IMF’s revised projections also indicate that Pakistan’s GDP growth will remain at 4% in 2026. However, the latest downward revision reflects ongoing economic challenges in the country, although the IMF has not given specific reasons for the revision.
This latest revision mirrors the forecast by the Asian Development Bank (ADB) last month, which also adjusted Pakistan’s growth forecast to 3% for the fiscal year 2024-25, up from the previously expected 2.8%.
Both institutions have cited challenges facing Pakistan’s economy, but have maintained a cautiously optimistic medium-term outlook.
Global Economic Growth Forecasts
Globally, the IMF expects a global growth rate of 3.3% for both 2025 and 2026, slightly below the historical average of 3.7%.
The IMF’s chief economist, Pierre-Olivier Gourinchas, highlighted that the global economy continues to face divergent growth patterns, with stronger-than-expected results in the US partly offsetting weaker results in other major economies.
Inflationary trends are expected to moderate in the coming years, with the IMF expecting global inflation to fall to 4.2% in 2025 and 3.5% in 2026. However, the IMF warned that inflation remains stubbornly high in some regions despite a global trend towards disinflation.
The IMF also noted a significant decline in energy commodity prices, with a projected drop of 2.6% in 2025, while non-fuel commodity prices are expected to increase by 2.5%, mainly due to adverse weather conditions affecting key producers.
Regional and major economies’ growth projections
The IMF’s global outlook includes more optimistic projections for some major economies. In the US, GDP growth is expected to reach 2.7% in 2025, revised up by 0.5 percentage points due to stronger domestic demand. However, growth in the US is expected to slow to 2.1% in 2026.
In contrast, the Eurozone faces a weaker economic trajectory, with growth expected to be 1% for 2025, down from a previous estimate of 1.2%.
This downgrade reflects slower-than-expected momentum, particularly in the manufacturing sector, and ongoing political and policy uncertainties. The IMF expects a recovery in 2026, when growth is expected to rise to 1.4%.
The UK is expected to see modest growth, with an estimated increase of 1.6% in 2025 and 1.5% in 2026.
Meanwhile, China’s GDP is expected to grow by 4.6% in 2025 and 4.5% in 2026, with the IMF urging China to boost domestic demand to support its economic expansion.
India, on the other hand, continues to show robust growth, with the IMF projecting solid GDP growth of 6.5% in both 2025 and 2026, in line with its potential.
As the IMF’s outlook suggests, the global economy remains in a period of uncertainty, with divergent growth trajectories across regions.
