World Bank pegs Pakistan FY26 growth at 3%, 3.4% in FY27
“World Bank sees growth at 3% in FY26, rising to 3.4% in FY27.”
Key points
- World Bank sees growth at 3% in FY26, rising to 3.4% in FY27.
- Tight fiscal policy and flood aftereffects will limit momentum.
- Reforms urged: tax base widening, SOE divestiture, market-based FX.
- Export share slide underscores need for trade and logistics upgrades.
Pakistan’s real GDP growth is expected to remain at 3% in FY26 and edge up to 3.4% in FY27, the World Bank said in its latest Pakistan Development Update. The lender warned that progress will be constrained by tight fiscal policy and lingering flood impacts, and urged sustained reforms to stabilise the economy and create jobs.
The report credited improved confidence, appropriate monetary policy and a rebound in industry and services for the FY25 uptick, while noting agriculture underperformed due to adverse weather and pest pressure. It recommended broadening the tax base, strengthening administration, reducing the state’s footprint through SOE divestitures and maintaining a market-determined exchange rate.
To unlock long-term growth, the Bank called for deeper trade and export reforms, pointing to a decline in exports from 16% of GDP in the 1990s to roughly 10% in 2024. It highlighted tariff simplification, stronger trade finance, better logistics and expanded digital and energy infrastructure as priorities to drive export-led expansion, including in IT services.
Officials quoted in the update said accelerating job creation and reinforcing social safety nets will be vital for resilience, especially as climate shocks continue to weigh on households and public finances.
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