Economy has expanded by three per cent in fiscal year 2025 ,the World Bank said in a report on Tuesday, but cautioned that growth is likely to remain the same in the next fiscal year due to the impacts of the recent floods.
Earlier this month, the WB had cut its growth forecast for Pakistan by half a per cent to 2.6pc for the current fiscal year due to the recent floods, which are also expected to push up inflation to 7.2pc. It had said that for FY 2025/26, real gross domestic product (GDP) growth was projected to remain around 2.6pc, as ongoing catastrophic floods had damped the forecast.
It projected a 3.1pc growth rate for the country in its previous biannual outlook in April 2025. Pakistan has set 4.2pc growth target and has since been looking at 3.5pc as part of its engagements with the International Monetary Fund (IMF).
In the report released today, titled — Staying the Course for Growth and Jobs — WB predicted that the economy’s “growth is projected to remain at three per cent for the fiscal year ending in June 2026, due to the impacts of recent floods on the agriculture sector, before picking up in the medium term as ongoing stability and continued reforms enhance growth prospects.”
It said that the country’s economy “expanded by three per cent in the fiscal year ending June 2025, up from 2.6pc in the previous year.”
“Immediate and lingering impacts of the recent floods are expected to weigh on growth, with real GDP growth projected to remain at three per cent in FY26,” it added.
Citing the reasons behind the expansion, the WB stated that, “Fiscal tightening and appropriate monetary policy helped anchor inflation and support current account and primary fiscal surpluses amidst a challenging global and domestic environment.”
