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According to the World Bank, Pakistan’s GDP growth for the current fiscal year (2024-25) is expected to remain at 2.8%, lower than the 3% forecast by the IMF earlier.
The World Bank has released its Global Economic Prospects Report 2025, which shows a 0.5% improvement compared to June 2024. The IMF had predicted a 3% growth, while the government had estimated a 3.6% growth for the year.
According to the report, Pakistan’s economy is expected to grow at a rate of 3.2% in the next fiscal year, with the country’s growth forecast being the lowest in the region. In comparison, India’s growth is expected to be 6.7%, Bhutan at 7.2%, the Maldives at 4.7%, Nepal at 5.1%, Bangladesh at 4.1%, and Sri Lanka at 3.5%.
The report also notes that the uncertainty following the February elections has decreased somewhat, and inflation has dropped to single digits for the first time since 2021. Pakistan’s foreign exchange reserves have also increased, thanks to the implementation of stringent fiscal and monetary policies.
It further mentions that moderate inflation will improve business and investor confidence, but warns that per capita income in Pakistan is expected to remain weak until 2026. The report predicts that per capita income will also be weak in Bangladesh and Sri Lanka, with an increase in interest payments on loans in both Pakistan and Bangladesh. However, there is a gradual decline expected in debt-to-GDP ratios.
The World Bank also highlights that delays in reforms could adversely affect economic activities. The report mentions that after the COVID-19 pandemic, food insecurity and unemployment have increased in the country.
