The World Bank has predicted Pakistan’s GDP growth to be 2.8% for the current fiscal year 2024-25, compared to the IMF’s projection of 3% and the government’s estimate of 3.6%. This is a 0.5% improvement from the World Bank’s June 2024 forecast, according to its “Global Economic Prospects Report 2025.”
The report anticipates Pakistan’s growth rate to improve to 3.2% in the next fiscal year but remains the lowest in the region. Comparatively, India is expected to grow at 6.7%, Bhutan at 7.2%, Maldives at 4.7%, Nepal at 5.1%, Bangladesh at 4.1%, and Sri Lanka at 3.5%.
The report highlights a reduction in uncertainty following the February elections and notes that inflation fell to single digits in 2024 for the first time since 2021. This, along with improved foreign exchange reserves due to strict fiscal and monetary policies, is expected to enhance business and investor confidence. However, per capita income in Pakistan is projected to remain weak until 2026.
The report also indicates that per capita income will remain weak in Pakistan, Bangladesh, and Sri Lanka, while Pakistan and Bangladesh will face rising debt servicing costs. Despite this, the debt-to-GDP ratio is expected to gradually decline. The World Bank stressed the importance of Pakistan’s strict adherence to the IMF loan program, warning that failure to do so could adversely impact economic activities.
