The World Bank has revised its GDP growth forecast for Pakistan, projecting a growth rate of 2.8% for the fiscal year 2024-25. This marks a slight improvement from the previous estimate of 2.3% made in June 2024. However, the new forecast remains below both the International Monetary Fund’s (IMF) projection of 3% and the government’s ambitious target of 3.6%.
In its 2025 World Economic Prospects Report, the World Bank highlighted that Pakistan’s growth lags behind several of its regional neighbors. India is expected to lead the South Asian region with a growth rate of 6.7%, followed by Bhutan at 7.2%, and other countries like Nepal, Maldives, Bangladesh, and Sri Lanka, all forecasted to grow faster than Pakistan.
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While there are some positive signs of recovery, particularly the drop in inflation to single digits for the first time since 2021, the report notes that Pakistan’s economic challenges persist. The improvement in inflation and foreign exchange reserves is largely credited to the government’s tight fiscal and monetary policies, which have reduced uncertainty following the February 2024 elections.
Despite these gains, the World Bank cautioned that Pakistan’s per capita income will remain weak until 2026, and the country’s rising debt burden remains a critical issue. Interest payments are expected to increase, and the country’s debt-to-GDP ratio, while projected to decline, will depend on the government’s adherence to the ongoing IMF loan program.
Experts believe that while the moderation of inflation and improved reserves offer some optimism, Pakistan’s long-term economic stability will require structural reforms and better management of external debt.
