The International Monetary Fund has lowered Pakistan’s GDP growth forecast for 2025 to 3% from the previous forecast of 3.2% in October 2024.
Meanwhile, the country’s GDP growth will remain at 4% in 2026, according to the IMF’s “World Economic Outlook Update: Global Growth: Mixed and Uncertain.”
The lender’s growth outlook is similar to that of the Asian Development Bank (ADB) which last month revised Pakistan’s growth forecast to 3% during the 2024-25 fiscal year against the previous figure of 2.8% expected in September 2024.
The Asian Development Bank, in its Asian Development Outlook (ADO) for December 2024, attributed the revised growth figures to increased macroeconomic stability which it said would support the recovery.
The bank also said that looser monetary policy due to a faster-than-expected easing of inflationary pressures should further support economic activity through a recovery in private investment, and noted that industrial production growth is expected to accelerate as import management measures are suspended and investors increase. Trust, easy access to foreign exchange.
Meanwhile, in its latest report, the International Monetary Fund predicted that global growth would reach 3.3% in 2025 and 2026 – a figure lower than the historical average of 3.7%.
The Washington-based bank said the outlook for 2025 was “broadly unchanged due to the upward revision in the United States offsetting the downward revisions in other major economies.”
Regarding global inflation, he said that it is expected to decline to 4.2% in 2025 and to 3.5% in 2026.
However, the IMF noted that although inflation continues to decline around the world, there are signs that progress has stalled in some countries, and that high inflation persists in a few cases.
“The global average sequential core inflation has been just above 2% over the past few months.”
Highlighting increasing economic policy uncertainty, the report said that “expectations of policy shifts under newly elected governments in 2024 have shaped financial market prices in recent months,” and that “bouts of political instability in some Asian and European countries “It shook the markets and pumped new blood.” Greater uncertainty over stalled progress on fiscal and structural policies.
The International Monetary Fund expected a 2.6% decline in the prices of energy commodities in 2025, and said that the prices of non-fuel commodities are expected to rise by 2.5% due to bad weather conditions affecting major producers.
Other economies
The report said that GDP growth in the United States is expected to reach 2.7% – 0.5% higher than the October forecast – in 2025, which will contract to 2.1% in 2026.
Meanwhile, in the euro zone, he said, “weaker than expected momentum at the end of 2024, especially in manufacturing, and rising political and policy uncertainty explain the downward revision of 0.2% to 1% in 2025.”
However, growth is expected to rise to 1.4% in 2026 due to strong domestic demand and lower uncertainty.
In the United Kingdom, growth is expected to reach 1.6% in 2025, followed by 1.5% next year.
China’s GDP growth, according to International Monetary Fund forecasts, is expected to reach 4.6% in 2025 and 4.5% in 2026, as the bank’s chief economist, Pierre-Olivier Gorinchas, stressed that the second largest economy in the world needs to make domestic demand A bigger engine for its power. growth.
“The Chinese economy needs to transform into a more inward-looking growth engine,” Gorinchas said.
India’s growth is expected to be strong at 6.5% in 2025 and 2026, as forecast in October and in line with potential.
-Additional inputs from Reuters
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