ISLAMABAD: The World Bank (WB) has projected Pakistan’s economic growth at around 3% in FY2025-26, significantly lower than the government’s official target of 4.2%.
In its latest Global Economic Prospects report, the WB said Pakistan’s growth is expected to remain at 3% in FY26 (July 2025–June 2026) before rising to 3.4% in FY2026-27, supported by a recovery in agricultural output and reconstruction activity following the 2025 floods.The report noted that stronger implementation of growth-enhancing structural reforms could present an upside risk to these projections.
In Pakistan and Morocco, deeper-than-expected regulatory reforms aimed at boosting private-sector activity may help accelerate growth, reduce informality and create jobs.
The World Bank highlighted that the easing of import restrictions and an expansion in bank credit, partly due to improved financial conditions, have contributed to stronger economic activity in Pakistan, particularly in the industrial sector.
Among oil-importing countries, current account balances have improved in Pakistan, Morocco and Tunisia, largely driven by higher remittances and tourism revenues. However, the report warned that additional increases in US tariffs could negatively affect exports in several economies, including Pakistan, especially those with highly concentrated export markets.
Despite recent improvements, Pakistan’s current account deficit is projected to widen in FY2026-27, reflecting rising import demand amid stronger growth, along with the post-flood normalisation of remittance inflows.
