The IMF has projected that Pakistan’s economy will grow by 3.5 percent during fiscal year 2026-27. The forecast suggests that the country may not achieve the federal government’s 4 percent growth target despite improving economic conditions.
The latest projection was released in the International Monetary Fund’s updated World Economic Outlook on Wednesday. The report also kept Pakistan’s growth estimate for fiscal year 2025-26 unchanged at 3.6 percent. These figures remain the same as those announced in the Fund’s April 2026 outlook.
According to the IMF, Pakistan’s economy recorded 3.2 percent growth in 2025. Economic activity is expected to improve to 3.6 percent in 2026 before easing slightly to 3.5 percent in 2027.
The latest forecast shows steady economic progress but also highlights the challenges Pakistan still faces. Although growth is expected to continue, the projected rate remains below the government’s target for the next fiscal year.
The report also presented the Fund’s updated outlook for the global economy. It expects world economic growth to reach 3.0 percent in 2026. Global growth is then forecast to improve to 3.4 percent in 2027. These estimates remain broadly unchanged compared to the April assessment.
The IMF noted that economic performance continues to differ across regions. It said ongoing geopolitical conflicts are creating pressure on energy-importing and vulnerable economies. Higher energy costs and global uncertainty remain key concerns for many countries.
At the same time, the report highlighted that rising investment in artificial intelligence is supporting growth in economies connected to the global technology supply chain. Increased demand for AI-related products and services is helping strengthen activity in several markets.
The Fund also said that progress in reducing global inflation has slowed. However, it noted that inflation risks are now more balanced than they were earlier this year.
Despite this improvement, the report warned that renewed geopolitical tensions and changes in financial market conditions could affect global economic stability. These developments could create fresh challenges for both advanced and developing economies.
The IMF encouraged governments to continue policies that support price stability and sustainable public finances. It also advised countries to rebuild fiscal buffers and strengthen economic resilience against future shocks.
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For Pakistan, the latest outlook points to continued economic recovery. However, the forecast indicates that achieving the government’s higher growth target will remain a challenge unless economic momentum strengthens further in the coming years.
