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ISLAMABAD, Oct 14 (APP):The International Monetary Fund (IMF) has projected Pakistan’s gross domestic product (GDP) growth rate at 3.6 percent for the fiscal year 2026, up from 2.7 percent recorded in FY2025.
According to the IMF World Economic Outlook (WEO) report for October 2025 released on Tuesday, Pakistan’s unemployment rate is expected to decline to 7.5 percent in FY2026, compared to 8 percent in the previous fiscal year.
At the onset of trade policy shifts and the surge in uncertainty, the April 2025-WEO revised the 2025 global growth projection downward by 0.5 percentage point to 2.8 percent.
According to the report, this was predicated on tariffs being supply shocks for tariff-imposing countries and demand shocks for the targeted, with uncertainty being a negative demand shock all around.
By July, announcements that lowered tariffs from their April highs prompted a modest upward revision to 3.0 percent.
Inflation projections, while little changed overall, went up for the United States and down for many other economies.
After a resilient start, the report said, the global economy is showing signs of a moderate slowdown, as predicted.
Incoming data in the first half of 2025 showed robust activity. Inflation in Asian economies was subdued, while it remained steady in the United States.
Advanced economies, traditionally reliant on immigration, are seeing sharp declines in net labor inflows, with implications for potential output.
As per the outlook, global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and to 3.1 percent in 2026.
This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced.
On an end-of-year basis, global growth is projected to slow down from 3.6 percent in 2024 to 2.6 percent in 2025. Advanced economies are forecast to grow about 1½ percent in 2025–26, with the United States slowing to 2.0 percent, the report added.
Emerging market and developing economies are projected to moderate to just above 4.0 percent. Inflation is expected to decline to 4.2 percent globally in 2025 and to 3.7 percent in 2026, with notable variation: above-target inflation in the United States—with risks tilted to the upside—and subdued inflation in much of the rest of the world.
World trade volume is forecast to grow at an average rate of 2.9 percent in 2025–26—boosted by front-loading in 2025 yet still much slower than the 3.5 percent growth rate in 2024—with persistent trade fragmentation limiting gains, the report added.