IMF sees brighter economic outlook for Pakistan, predicts growth and lower unemployment

ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) has released its latest economic outlook report, painting a cautiously optimistic picture of Pakistan’s economy for the next two years.

According to the IMF, Pakistan’s gross domestic product (GDP) is expected to grow by 3.5% in 2025 and further improve to 4.3% in 2026, signaling signs of recovery after years of economic turbulence.

The report also highlights a gradual fall in inflation, predicting that consumer prices will ease from 23.6% in 2025 to 14.3% in 2026. The IMF noted that while stability has returned to some extent, inflationary pressure continues to bite, keeping household budgets under strain.

On the external front, the current account deficit is forecast to narrow from 1.8% of GDP in 2025 to 1.3% in 2026, reflecting improved trade and fiscal discipline.

A notable improvement is also expected in the job market, with unemployment projected to drop from 8.3% in 2025 to 7.3% in 2026. The IMF attributed this to an expected pickup in industrial and services sector activities.

The report pointed out that Pakistan remains one of the major oil-importing nations, and global oil prices continue to influence its external balance. Despite these challenges, the IMF acknowledged that the country is moving toward macroeconomic stability, although “the fight against inflation is far from over.”

The IMF urged Pakistan to stick to its reform path, maintain fiscal discipline, and strengthen structural reforms to keep the economy on track.