IMF Projects Pakistan’s Inflation to Rise to 6% in FY2025-26

The International Monetary Fund (IMF) has forecast that Pakistan’s Consumer Price Index (CPI)-based inflation will climb to 6% in the 2025–26 fiscal year, up from 4.5% in the previous year. The projection was released in the IMF’s latest World Economic Outlook (WEO) on Tuesday. According to the report, inflation in Pakistan is expected to increase from 4.5% in FY25 to 6% in the current fiscal year, bucking the global trend. Worldwide, inflation is projected to decline to 4.2% in 2025 and further to 3.7% in 2026. The IMF also maintained its economic growth forecast for Pakistan at 3.6% for FY2025-26, despite projecting a slowdown in global growth from 3.3% in 2024 to 3.1% in 2026. On the employment front, the IMF expects Pakistan’s unemployment rate to fall to 7.5% in the current fiscal year, down from 8% last year. However, the IMF noted that its forecasts do not account for the impact of recent floods, the effects of which are still being assessed. Earlier this month, Pakistan informed the IMF that economic losses from the floods have reached Rs. 371 billion. As a result, the government has revised its GDP growth target downward by 0.3 percentage points, lowering it from 4.2% to 3.9%.