World Bank Predicts Decline in Inflation, Modest Growth for Pakistan in Coming Years

The World Bank has forecasted a decrease in inflation and modest economic growth for Pakistan in the coming years, according to its latest Pakistan Development Outlook report.

In its projections, the World Bank anticipates Pakistan’s GDP growth to be below 3 percent over the next three years. Specifically, the growth rate is forecasted to be 1.8 percent for the current fiscal year, with a slight increase to 2.3 percent in 2025 and further growth to 2.7 percent in 2026. Agricultural growth, a significant component of Pakistan’s economy, is expected to hover around 3 percent for the current fiscal year and dip slightly to 2.2 percent in both 2025 and 2026.

Regarding inflation, the World Bank estimates the rate to be 26 percent for the ongoing fiscal year. However, there is optimism for improvement, with inflation projected to decline to 15 percent in fiscal year 2025 and further decrease to 11.5 percent in fiscal year 2026. This anticipated reduction in inflation is a positive sign for consumers and the overall economy, as lower inflation can lead to increased purchasing power and improved economic stability.

In terms of industrial growth, the World Bank forecasts a modest increase, with industrial growth expected to be 1.8 percent in the current fiscal year, followed by a gradual rise to 2.2 percent in fiscal year 2025 and 2.4 percent in fiscal year 2026. This indicates a slow but steady recovery in industrial output, which is crucial for driving economic expansion and creating employment opportunities.

Additionally, the fiscal deficit, a key economic indicator reflecting the government’s financial health, is projected to be 8 percent of GDP for the ongoing fiscal year. However, there is a positive trend expected, with the deficit forecasted to decrease to 7.4 percent in fiscal year 2025 and further decline to 6.6 percent in fiscal year 2026. This reduction in the fiscal deficit suggests improved fiscal management and control over government spending, which could contribute to overall economic stability and sustainability.

The World Bank’s projections offer a cautious outlook for Pakistan’s economy, with expectations of moderate growth and a gradual decline in inflation and fiscal deficit over the coming years. These forecasts provide valuable insights for policymakers and stakeholders to formulate strategies aimed at promoting economic growth and stability in the country.