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Pakistan is unlikely to achieve the International Monetary Fund’s (IMF) projected 3.2% GDP growth for the current fiscal year as exports, investment and industrial activity remain under pressure, according to economists. Most analysts expect economic growth to remain between 2.5% and 3% , even if macroeconomic stability holds and no major external or domestic shocks emerge.
Former finance minister Dr Hafeez Pasha said recent growth figures rely heavily on public-sector expansion rather than sustainable private activity. He noted that reported growth in the previous fiscal year was driven by unusually strong expansion in the power sector and public administration, reflecting higher government spending and employment.
Former finance ministry advisor Dr Ashfaque Hassan Khan also projected growth in the 2.5-3% range, pointing to weak exports, declining investment and stagnant agriculture. He noted that the reported growth, driven by public spending, conflicts with the government’s austerity plans and is likely to keep overall growth around 3%.
He questioned the strength of quarterly growth estimates, noting that while the National Accounts Committee reported 3.71% growth in the first quarter of fiscal year 2025-26, the quarterly GDP framework remains weak and lacks firm validation.
Global economic uncertainty, including trade disputes and tariff tensions, could further pressure Pakistan’s growth, analysts say. The IMF recently lowered Pakistan’s GDP forecast to 3.2% from 3.6% in October 2025, while projecting global growth of 3.3% in 2026 and 3.2% in 2027.
Domestically, economic indicators show strain: foreign direct investment fell 43% to $808 million in the first half of FY2026, exports dropped 8.7% to $15.18 billion, imports rose 11.28% to $34.4 billion, and the trade deficit widened to $19.2 billion. Exports have declined for five consecutive months, with December down more than 20% year-on-year.
In contrast, former finance ministry advisor Dr Khaqan Najeeb said the IMF’s growth projection remains achievable under certain conditions. He pointed to falling inflation, relative stability in external accounts and gradually easing financial conditions as factors supporting a moderate recovery.
Mr. Najeeb projected GDP growth in the 3.0-3.75% range, provided macroeconomic discipline is maintained and no major shocks occur. He cautioned, however, that weak exports, low investment and structural constraints will continue to limit the pace of recovery.
He added that while global growth remains supportive due to technology investment and easing inflation, risks from geopolitical tensions and trade disruptions persist, underscoring the need for sustained policy stability and structural reforms.
