ISLAMABAD: The International Monetary Fund has revised downward Pakistan’s economic growth outlook for the current fiscal year, cutting its GDP growth forecast for FY2026 to 3.2%, citing persistent structural weaknesses in the economy.

According to the IMF’s latest World Economic Outlook report, the revised projection marks a 0.4 percentage point reduction from the earlier estimate of 3.6% released in October. The downgrade reflects challenges that continue to constrain economic performance, despite recent stabilisation efforts.

The IMF, however, projected an improvement in growth in the following year, forecasting Pakistan’s GDP to expand by 4.1% in FY2027, indicating cautious optimism if reforms continue.

In contrast, the Fund raised India’s GDP growth projection by 0.2 percentage points, maintaining it at 6.4% for FY2026, underscoring divergent growth trajectories in the region.

Pakistan’s National Economic Council has not yet approved any revision to the country’s official growth target. Meanwhile, the Ministry of Finance has said economic growth in the current fiscal year could approach 4%, though it noted that the final assessment will depend on second-quarter economic data.

The IMF report also highlighted expectations of easing global inflation, while warning that inflation in the United States could return to target levels more slowly. The Fund urged governments to rebuild fiscal buffers, safeguard price and financial stability, reduce uncertainty, and pursue structural reforms to support sustainable economic growth.