The International Monetary Fund (IMF) has issued its new World Economic Outlook report (April 2025), showing a downward revision of the forecast of Pakistan’s economic growth in the current fiscal year.

The IMF now forecasts Pakistan’s GDP growth at only 2.6%, a drop from the previous estimate of 3%, and below the government's very optimistic 3.6% target.

In October 2024, the IMF had estimated a growth rate of 3.2%, and in January 2025, it revised it to 3%. This latest estimate is an indication of ongoing economic troubles for the nation.

But there is some respite on the inflation front. The IMF now projects inflation at 5.1% going forward, a sharp change from the earlier forecast of 10%. The government of Pakistan, on its part, had estimated average inflation for the current fiscal year to be 12%. In FY 2025-26, inflation is anticipated to go up to 7.8%, and remain stable at 6.5% up to 2027-28 and 2028-29.

In a surprising but welcome turn of events, Pakistan's current account deficit has also been revised sharply. The IMF now estimates it to be merely 0.1% of GDP, compared with its previous estimate of $3.7 billion, now cut down to just $400 million. For the fiscal year to come, the deficit is estimated at 0.4% of GDP.

In the meantime, Finance Minister Muhammad Aurangzeb held a meeting with IMF Managing Director Kristalina Georgieva in Washington.

He expressed gratitude to the IMF team for concluding a staff-level agreement under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), reaffirming Pakistan's commitment to the continuation of reforms. The minister also invited Ms. Georgieva, on behalf of the Prime Minister, to visit Pakistan.