The International Monetary Fund (IMF) has cut Pakistan’s growth forecast to 2.6%, citing the impact of record-high U.S. tariffs and warning that escalating trade tensions could further slow economic progress.
This revision follows an earlier downgrade in January, when the IMF lowered its estimate from 3.2% to 3% for the current fiscal year.
The latest update, compiled within 10 days of U.S. President Donald Trump’s announcement of universal tariffs, highlights the 29% tariff imposed on Pakistani exports to the U.S. Economists predict immediate challenges but acknowledge potential long-term opportunities.
According to the IMF, Pakistan’s growth is expected to reach 3.6% in the next fiscal year. Inflation is projected at 5.1% for the current year and 7.7% for the next year.
Also read: IMF demands end to federal funding for provincial projects
The newly imposed tariffs could severely impact Pakistan’s vital export sector, prompting experts to urge greater diversification.
The Pakistan Institute of Development Economics (PIDE) recently warned, “A storm may be brewing on Pakistan’s trade horizon.” The institute further said that the U.S. reciprocal tariffs could have devastating consequences for the country’s export industry, reinforcing the urgency for economic adaptability.
