ISLAMABAD (Dunya News) – The World Bank has warned that tensions in the Middle East are impacting several countries, including Pakistan, leading to higher oil and gas prices and increased inflationary pressures.
According to the Bank’s regional economic report, Pakistan’s annual growth is now projected to fall short of the 4.2% target, with GDP expected to grow only 3% in the current fiscal year, down from an earlier forecast of 3.4%.
Last year, Pakistan’s GDP growth stood at 3.1%. Inflation is projected to rise to 7.4% in 2026.
The report also anticipates a shift from a current account surplus to a deficit of around 1.2% of GDP, although the fiscal deficit is expected to improve slightly to 4.3%. Remittances from Gulf countries, tourism, and investment could also be negatively affected.
Additionally, the World Bank highlighted government reforms in the sugar sector, including removing price and export controls, granting farmers full freedom in sugarcane cultivation, and aiming to boost efficiency and market competitiveness.