Islamabad: The World Bank has released a fresh report on Pakistan’s economic situation, according to which the country’s economic growth rate in the fiscal year 2025-26 was 3.7 percent, while in the previous fiscal year this rate was 3.2 percent.
According to the report, financial discipline and economic stability measures have improved, however, high inflation, energy prices and external economic risks are posing challenges to recovery.
The World Bank has predicted Pakistan’s economic growth to be 3.8 percent for the fiscal year 2026-27. During this period, the general inflation rate is likely to reach 8.2 percent.
According to the report, the average inflation rate in the last fiscal year was 7.1 percent, which was higher than the 4.5 percent rate in the previous fiscal year. The increase in energy and food prices increased inflationary pressures.
According to the World Bank, the ongoing conflict in the Middle East and the uncertainty in the global energy market may pose risks to Pakistan’s economic performance. The increase in imported energy costs is likely to increase pressure on domestic spending and prices.
The report states that the growth rate of the agricultural sector is 2.9 percent and the growth rate of the services sector is 4.1 percent. Livestock played an important role in the agricultural sector.
An improvement in the financial situation is also mentioned. According to the report, the overall fiscal deficit in the fiscal year 2025-26 was reduced to 2.6 percent of GDP, while the primary fiscal surplus reached 2.9 percent.
The World Bank said that the improvement in Pakistan’s credit rating by international rating agencies S&P and Moody’s and the issuance of a $3 billion Eurobond are important indicators of the restoration of access to global financial markets.
The report emphasizes that structural reforms, increased private investment, improved productivity and the creation of new job opportunities are essential for sustainable economic growth.
