Summary The IMF kept Pakistan’s FY2025-26 growth forecast at 3.5% but warned renewed conflict in the Middle East could fuel inflation, disrupt energy supplies and slow global growth.
ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) has warned that the risk of renewed conflict in the Middle East poses a major threat to the global economy, while maintaining Pakistan's economic growth forecast at 3.5 percent for the current fiscal year.
According to the IMF report, Pakistan's growth projection remains unchanged at 3.5 percent, compared with the government's target of 4 percent. The report also forecasts a slight slowdown from the estimated 3.7 percent growth recorded in the previous fiscal year.
Pakistan assures IMF transfer of trillions from commercial banks to state treasury
The IMF cautioned that escalating tensions in the Middle East could drive global inflation higher, projecting worldwide inflation to reach 4.7 percent in 2026. It also estimated that average crude oil prices could remain around $89 per barrel during the year.
The report warned that any disruption in the Strait of Hormuz could severely affect global energy supplies, with far-reaching consequences for economies around the world.
The IMF projected global economic growth at 3 percent in 2026 and identified artificial intelligence as a positive factor supporting economic activity.
According to the report, the ongoing situation in the Middle East is already weighing on regional and global economic activity, while Iraq, Kuwait and Qatar could face economic contraction during 2026.
