IMF projects Pakistan's inflation rising to 9.9% in 2027 as growth slows
Pakistan's inflation rate is projected to rise to 9.9 per cent in 2027, up from 7.1 per cent in 2026 and 4.5 per cent in 2025, according to the International Monetary Fund's World Economic Outlook released on Tuesday. The forecast puts consumer price growth on a path to more than double across the three-year horizon, a trajectory that would shape the monetary policy debate in Pakistan over the period.
The same data project Pakistan's gross domestic product growth at 3.6 per cent in 2026, compared with 3.2 per cent in 2025, before moderating to 3.5 per cent in 2027. The IMF expects the country's current account balance to remain flat in 2026 and then slip into a deficit equivalent to 1 per cent of GDP in 2027, against a surplus of 0.5 per cent of GDP in 2025. Unemployment is forecast to decline to 6.9 per cent in 2026 and 6.5 per cent in 2027, from 7.1 per cent in 2025.
Globally, the outlook projects growth slowing to 3.1 per cent in 2026 before rebounding to 3.4 per cent in 2027, while global headline inflation is expected to rise notably to 4.7 per cent in 2026 and then ease to 4.1 per cent in 2027. The report said the world economy is "again proving resilient, but unevenly so", noting that activity in the first half of 2026 held up better than expected despite the war in the Middle East and continuing strains from trade tensions. It attributed a demand impulse to the technology cycle, driven by strong investment in artificial intelligence, and said the interaction of geopolitics and technology has produced a split global economy, with favourable terms of trade or technology-related exports cushioning some countries while others face higher import bills and weaker demand.
The IMF said flexible supply responses, rerouting of shipments, inventory drawdowns, fiscal support measures and lower energy intensity than in previous decades had helped contain the hit to activity from the war. It added that energy-importing economies outside the technology value chain face the most difficult outlook, and that the margins of adjustment supporting resilience are not limitless, with risks skewed to the downside. Further escalation in conflicts, a reassessment of expectations around AI, renewed trade tensions and fiscal vulnerabilities could weaken growth, the report said, while stronger AI investment momentum, productivity gains from AI or a sustained easing of geopolitical and trade tensions could strengthen it.
