World Bank Predicts Slower Growth and Rising Inflation for Pakistan
The World Bank warned that Pakistan’s economy could slow down as floods damage farms and food supply chains. The new report on Pakistan’s economic outlook highlights tough challenges ahead
.Slower Growth and Rising Prices
The World Bank expectsPakistan’s GDP to grow by 2.6 percent in FY2025–26 — below the 4.2 percent target. It predicts growth may rise to 3.6 percent in FY2026–27 as recovery gains pace. Flood damage continues to slow the economy and limit real growth.
The Bank also expects inflation to rise above 7 percent due to food shortages and supply issues. The fiscal deficit may widen to 5.5 percent as the government increases spending on relief and recovery projects.
Agriculture and Reform Focus
Punjab’s agriculture output dropped by 10 percent, hitting crops like rice, sugarcane, cotton, wheat, and maize. The World Bank said the sector’s recovery will shape
Pakistan’s overall economic progress.
It expects poverty to ease slightly next year — from 44 percent to 43 percent. Strong fiscal discipline, higher revenue, and spending control can help stabilise the economy.
The report also praised the government’s five-year reform plan. Tariff cuts may support exports, while remittances and lower oil prices could balance trade and encourage steady recovery.
