WASHINGTON (Dunya News) – The International Monetary Fund has released its World Economic Outlook 2026, warning that ongoing conflict in the Middle East is weighing on global economic growth.
According to the report, global growth is now projected at 3.4 per cent, reflecting a downward revision of 0.2 percentage points due to disruptions in energy supply and market uncertainty linked to regional tensions.
The outlook for Pakistan also remains challenging. The IMF forecasts economic growth at 3.6 per cent for the current fiscal year, falling short of the government’s 4.2 per cent target. Inflation is expected to rise to 7.2 per cent this year and further increase to 8.4 per cent in the next fiscal year.
The report noted that inflation stood at 4.5 per cent in the previous fiscal year, indicating a renewed upward trend. However, unemployment is projected to decline slightly from 7.1 per cent to 6.9 per cent this year, with a further drop to 6.5 per cent anticipated next year.
On external accounts, the current account deficit is expected to remain contained at 0.4 per cent of GDP this fiscal year but may widen to 0.9 per cent in the following year.
The IMF emphasised that the duration and intensity of the Middle East conflict will play a crucial role in shaping the global economic outlook. It also urged policymakers to reassess priorities in response to evolving challenges in energy markets and international trade.