The IMF has made it clear in its latest outlook report on Pakistan’s economy that inflation in the country may go up again. According to the organization, the inflation rate may go up to 4.5 to 6.3 percent during the current fiscal year, while it may reach 8.9 percent after increasing by June 2026 next year.
The report states that inflation was recorded at 3.2 percent at the end of the last fiscal year, however, further pressure on prices is expected given the future internal and external economic environment.
In its update, the IMF has predicted 3.2 percent GDP growth for Pakistan’s economic development, while the unemployment rate is likely to come down from 8 percent to 7.5 percent.
The organization says that tax revenue is gradually improving and by the fiscal year 2026, this rate may reach 16.3 percent of GDP, which was 15.9 percent in the fiscal year 2025.
Regarding the fiscal deficit, the report says that the current 5.4 percent deficit may come down to 4 percent in the next fiscal year. Regarding the overall debt burden, it has been said that it will be 69.6 percent of GDP in 2026, while it is currently 70.6 percent.
For the external debt ratio, the IMF has maintained the estimate of 22.5 percent, which was the same as last year.
Showing the possibility of a slight decline in investment, the report says that investment may remain at 0.5 percent of GDP next year, while it was 0.6 percent in 2025.
Regarding foreign exchange reserves, the IMF has cautiously estimated that Pakistan could have reserves of up to $17.8 billion by June 2026, a significant increase from the current $14.5 billion.
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