ISLAMABAD: The World Bank has issued its latest economic update report on Pakistan, warning of higher inflation and a slowdown in economic growth in the coming fiscal year.
According to the report, Pakistan’s economic growth is projected to remain at 3 percent in fiscal year 2026, slightly lower than the earlier estimate of 3.4 percent. The report noted that growth stood at 3.1 percent in fiscal year 2025.
On inflation, the World Bank cautioned that the average inflation rate, which remained around 4.5 percent in fiscal year 2025, could rise significantly to 7.4 percent in fiscal year 2026, increasing pressure on household budgets.
The report further warned that the current account balance, which posted a surplus of 0.5 percent in fiscal year 2025, may shift into a deficit of 1.2 percent in the next fiscal year.
Meanwhile, the Asian Development Bank (ADB) presented a more optimistic outlook, projecting Pakistan’s growth at 3.5 percent in the current fiscal year and 4.5 percent in the next. The ADB estimated inflation to remain between 6 and 6.5 percent, while cautioning that external risks such as regional tensions, energy prices, weaker remittances, and global shocks could affect economic stability.
Economists say the contrasting forecasts highlight both opportunities and challenges for Pakistan’s economy as it navigates ongoing fiscal pressures and external uncertainties.
