Pakistan’s economy still looks shaky after efforts to fix big financial problems. Slow growth, high inflation, poverty and outside pressures keep making it hard for the country to recover in a real way.
The International Monetary Fund’s latest World Economic Outlook says Pakistan’s economy will grow by 3.5 per cent this year. At the time inflation is projected to hit 9.9 per cent on average. The current account is also expected to run a deficit to one per cent of gross domestic product. Together these numbers show that Pakistan is still at risk from economic shocks and that stability hasn’t yet brought widespread improvement for most people.
There’s another issue. These numbers were made months ago. They might not account for how fast the world is changing. They may have assumed things would calm down in politics but that hasn’t happened. Conflicts in the Middle East and between Russia and Ukraine are still going on. They are causing uncertainty, cutting energy supplies and making global trade harder. For Pakistan, which relies heavily on imports and has huge money to spend, these problems could make recovery even tougher.
In fact, the projected growth of 3.5 per cent is worrying on its own. Last year, Pakistan’s economy grew by 3.6 per cent. This year’s forecast is even low, which means fewer jobs, slower income growth and less progress in fighting poverty. With the population growing and millions of people needing work, this kind of growth won’t be enough to make a big difference in people’s lives.
The situation is worse when compared to the rest of the region. South Asia is expected to grow by 6.4 per cent in 2026, way faster than Pakistan. This gap shows that Pakistan still can’t build a lasting growth model based on investment, exports, better productivity and stronger industries. Even though global growth is expected to stay moderate, Pakistan’s struggles are not just because of outside problems. They also come from issues inside the country that past governments have failed to fix.
Inflation is another problem. The IMF had predicted that inflation would average 9.9 per cent. The real number has already gone beyond it. It reached 11.1 per cent in August and 10.3 per cent in September. For people, the effects are quick to notice. Higher electricity, gas and oil prices, taxes and the cost of essentials have already made the lives of the common people unbearable. Economic stability does not mean much if the cost of changes keeps falling on people who are already struggling to get by.
Export performance is another problem. Shipping problems that are affecting trade with Middle Eastern countries have made this situation more uncertain for exporters. Sending products by air can cost much for many companies, especially those that don’t have much money to work with. If these problems don’t get better, export growth might not reach what the government expects which could limit the country’s ability to make money and pay for important imports.
The current account forecast is therefore something that needs watching. Higher oil prices and shipping costs can make the cost of imports go up even if the economy is not doing well. If exports don’t grow enough the gap in money could create more pressure on the foreign exchange reserves and the exchange rate. Remittances have given some help. More money coming in from Pakistanis working abroad has helped keep money available and has supported people’s spending. This improvement might not last. Some of the money coming in might be from temporary situations linked to the crisis in the Middle East, like jobs and travel choices made by Pakistani workers. If the situation changes, remittance growth could slow, which would make the economy face outside problems again.
Pakistan’s job numbers also need careful checking. The IMF says that unemployment will go down from 6.9 per cent in the fiscal year to 6.5 percent in FY2027. But other estimates say that unemployment is already 22 per cent, based on the Labour Force Survey data.
Poverty makes everything more urgent. The World Bank says that 47.9 per cent of people in Pakistan are poor, according to the middle-income poverty line for FY2025, but different numbers come from different ways of looking at the problem. The current government spending does not leave much room for projects that help development, education, health care and training for better jobs. The government needs to take a look at how it spends money. Now most of the budget is used for daily expenses, about 93 per cent of the whole budget. This leaves little money for investments that can make the economy stronger in the long run.
The biggest problem is to save the poorest people from rising inflation and use the country’s resources in areas that make money and jobs. Without these changes, slow growth, high prices and other problems will keep making each other worse. Pakistan can’t keep borrowing for an indefinite time . It has to build an economy that can promote exports, attract foreign investment and create good jobs for its people.