The World Bank has slightly revised down Pakistan’s growth forecast for the current fiscal year to 2.7%, citing persistent constraints due to tight monetary and fiscal policies despite macroeconomic stability.
According to details, the World Bank had previously projected Pakistan’s economic growth at 2.8% for the current fiscal year in the Pakistan Development Update (PDU) released in October last year.
In a statement issued on Wednesday, the World Bank noted that the growth rate remains subject to significant downside risks. However, it forecasted that the economic growth rate would rise to 3.1% in the next fiscal year (FY26) and reach 3.4% in FY27.
In an unusual move, the World Bank did not release its regular biannual PDU, originally scheduled for official launch on April 8, and postponed it at the last minute without providing an explanation. A World Bank spokesperson stated that the management was attending the Spring Meetings in Washington, which is why the PDU was not released as usual. Instead, a statement was issued.
According to the statement, real GDP growth is expected to be supported by a recovery in private consumption and investment, driven by easing inflation, lower interest rates, and the restoration of business confidence. The report noted that Pakistan’s economy is stabilizing with declining inflation, improved financial conditions, current account surpluses, and a primary fiscal surplus.
However, economic growth remained weak in the first half of the fiscal year due to continued tight macroeconomic policies. Agricultural growth was limited due to adverse weather and pest infestations. Industrial activity also declined, impacted by higher input costs and taxes, and there was a reduction in public spending.
