The International Monetary Fund (IMF) has warned of a further rise in inflation in Pakistan during the current fiscal year, projecting that the rate could reach 9.9%.
The IMF has released its World Economic Outlook 2026, which forecasts higher inflation in Pakistan this fiscal year. According to the report, inflation stood at 7.1% in the previous fiscal year and is projected to reach 9.9% in the current fiscal year.
Pakistan’s economic growth is expected to be 3.5% this year, compared with GDP growth of 3.6% in the previous fiscal year. The current account deficit is projected at 1% of GDP, while unemployment is expected to stand at 6.5% during the current fiscal year.
According to the IMF, global growth was 3.5% in 2025 and is expected to slow to 3.1% in 2026. Global economic growth is projected to reach 3.4% in 2027.
The IMF’s global economic outlook projects inflation at 4.7% in 2026 due to the war in the Middle East. The report describes a global economy divided into two groups. Countries linked to the artificial intelligence sector or exporting energy are performing better, while energy-importing countries and those outside the technology race face inflation, higher import bills and fiscal pressure.
The IMF says energy reserves are declining despite resilient supply chains and efforts to compensate for oil production through alternative sources. Oil prices could rise sharply in the event of a geopolitical crisis. High public debt and interest rates have limited governments’ fiscal space. The report stresses the need for medium-term stability, deficit control and targeted relief for the most vulnerable.
