The World Bank report has revised its forecast for Pakistan’s GDP growth in the fiscal year 2024-25 to 2.8%, marking a rise of 0.5% from its previous estimate of 2.3% in June 2024.
However, this projection remains below the International Monetary Fund’s (IMF) growth forecast of 3%. This percentage is also lower than the government’s target of 3.6%.
The report notes that while Pakistan’s economy is showing slight signs of recovery, it still faces significant challenges. Pakistan’s economic growth is far behind its regional neighbors, report say.
India is expected to lead the South Asian region with a growth rate of 6.7%, followed by Bhutan at 7.2%, Maldives at 4.7%, Nepal at 5.1%, Bangladesh at 4.1%, and Sri Lanka at 3.5%.
However report mention that Pakistan has made progress in addressing several other economic challenges. Inflation, which had reached double digits in recent years, has dropped to single digits for the first time since 2021, boosting the country’s foreign exchange reserves.
Pakistan’s current account surplus has been steadily improving, with a surplus of US$582 million in December 2024 and US$684 million in November 2024.
Despite these positive developments, the World Bank report mentions that Pakistan’s per capita income is expected to remain weak until 2026. This aligns with broader regional trends, as both Bangladesh and Sri Lanka are facing similar difficulties.
The report also highlights the rising burden of debt, with interest payments projected to increase in both Pakistan and Bangladesh.
Pakistan’s debt-to-GDP ratio is expected to gradually decline, provided the government maintains its commitment to the ongoing IMF loan program. The World Bank emphasized the importance of adhering to IMF guidelines, cautioning that any deviation from the program could severely impact the country’s economic stability.
