THE IMF’s latest World Economic Outlook projects Pakistan’s economy to grow by 3.5pc in the current fiscal year, while average inflation climbs to 9.9pc.
asserted
inflation → project → 9.9pc
The current account is expected to slip into a deficit of 1pc of GDP.
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account → expect → GDP
This forecast points to an economy that remains vulnerable despite recent gains in macroeconomic stability.
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that → point → stability
The economy expanded by 3.6pc last year.
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economy → expand → 3.6pc
Further slowdown matters for a country with a rapidly increasing population, entrenched poverty, and high unemployment.
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slowdown → increase → population
Growth at this pace will hardly raise incomes meaningfully or absorb new entrants into the labour market.
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Growth → raise → market
Inflation poses another challenge.
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Inflation → pose → challenge
After easing to 7.1pc last year, it is forecast to rise sharply, leading to fears of further erosion of purchasing power.
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it → ease → power
For families already squeezed by high energy costs, taxes, and essential expenses, renewed price pressures will undermine any benefits from economic stabilisation.
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pressures → squeeze → stabilisation
The projected current account deficit signals renewed pressure on foreign exchange earnings.
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deficit → project → earnings
Higher oil prices and shipping disruptions make imports more expensive.
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imports → make → ?
Unless exports grow faster and are more diversified, stronger domestic demand could again widen the external gap.
uncertain
demand → grow → gap
The IMF expects unemployment to decline to 6.5pc in FY27 from 6.9pc the previous year.
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unemployment → expect → 6.9pc
But, in the absence of stronger growth, which can create a sufficient number of jobs, that is hardly of any comfort.
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that → create → comfort
It does not establish whether new jobs will be productive, secure or adequately paid.
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jobs → establish → ?
Nor does it show whether employment is expanding fast enough to keep pace with the working-age population.
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employment → show → population
The South Asia region is forecast to grow by 6.4pc in 2026.
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region → forecast → 2026
Pakistan’s 3.5pc projection places it far below the regional average, highlighting our failure to build a sustained growth engine.
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projection → place → engine
The global picture is also distressing.
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picture → distress → ?
The IMF forecasts global growth of 3.1pc in 2026, rising to 3.4pc in 2027.
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IMF → forecast → 2027
Investment in AI is supporting activity in some economies.
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Investment → support → economies
Others face higher energy costs, trade disruptions, and tighter financial conditions.
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Others → face → costs
Growth is also becoming increasingly uneven.
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Growth → become → ?
We must prepare for these pressures rather than assume that stabilisation will deliver prosperity.
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stabilisation → prepare → prosperity
The immediate task is to contain inflation and protect vulnerable households without reviving unsustainable subsidies or excessive demand.
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task → contain → subsidies
For that, the government must shift resources towards productive investment, improve the competitiveness of industry, broaden the tax base and expand export capacity.
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government → shift → capacity
These changes require consistent policies, not another short-lived cycle of incentives and concessions.
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changes → require → incentives
The IMF projections expose the cost of postponing structural reform.
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projections → expose → reform
An economy growing at 3.5pc, with inflation approaching double digits and a weakening external balance, remains vulnerable to the next shock.
asserted
inflation → grow → shock
The Aporia
