The International Monetary Fund has projected Pakistans real GDP growth at 3.2% for 2026, suggesting the country has achieved short-term economic stabilization but continues to face significant structural challenges including heavy debt, weak investment, and sluggish employment growth.
According to the latest IMF assessment, Pakistans economy is projected to inch up from 2.6% growth in FY2024 to 3.2% by FY2026, a pace that barely matches population growth in the country of 240.5 million people. This modest trajectory underscores the difficult path ahead for sustainable economic development.
The projections depict an economy that has regained stability through sharp fiscal and monetary adjustments under the IMF reform program, but remains locked into a narrow stabilization path. The immediate risk of economic free fall has eased significantly, yet relief for ordinary households remains limited as inflation and cost of living pressures persist.
A separate UN report forecasts slightly higher growth of 3.5% in 2026, citing continued implementation of IMF reforms and steady economic recovery. Early indicators appear positive, with Pakistan reporting 3.71% growth in the first quarter of FY26, marking sharp improvement over 1.80% growth during the same period in FY25.
Industrial output has shown particularly strong recovery, expanding by 9.38% in Q1 FY26 compared to just 0.12% growth in Q1 FY25. This industrial surge, driven by manufacturing and construction sectors, provides hope for broader economic momentum.
However, the World Bank projects more conservative growth of 3% for FY26, citing impacts from recent floods on the crucial agriculture sector. The varying forecasts reflect uncertainty about external shocks and the governments ability to maintain reform momentum while managing social pressures.