GDP Growth
UNITED NATIONS: The United Nations has projected a modest economic rebound for Pakistan in 2025, forecasting a Gross Domestic Product (GDP) growth rate of 2.3 percent. This projection comes as part of the UN’s updated global economic forecast, released in its latest report titled World Economic Situation and Prospects 2025.
The report outlines cautious optimism for the South Asian region and reflects Pakistan’s gradual recovery following a period of economic contraction.
According to the UN, Pakistan’s economy is showing signs of stabilization after experiencing significant turbulence in recent years. The expected 2.3% growth rate indicates a turnaround that coincides with broader regional trends, as South Asia is set to register robust growth — projected at 5.7% in 2025 and 6.0% in 2026. This regional upswing will be driven largely by India’s strong performance and economic recoveries in countries such as Bhutan, Nepal, and Sri Lanka.
The report notes that declining inflation has enabled central banks across South Asia to begin or maintain monetary easing policies, providing much-needed relief to struggling economies.
For Pakistan, this has coincided with a continued focus on fiscal consolidation and economic reform under the supervision of the International Monetary Fund (IMF). The IMF-supported programmes aim to improve economic governance, manage public debt, and build investor confidence.
Despite these positive signals, the global context remains fragile. The UN warns that the world economy stands at a precarious crossroads, increasingly impacted by geopolitical instability, trade tensions, and rising protectionism.
A recent surge in tariffs, particularly those imposed by the United States, has driven up global production costs and disrupted supply chains, leading to heightened financial volatility.
This uncertain global environment has led to delays in business investment decisions, exacerbating challenges such as high debt levels, weak productivity growth, and political instability in several regions. Consequently, global GDP growth is now forecast to slow to 2.4% in 2025, a decline from 2.9% in 2024, and a downward revision of 0.4 percentage points from the UN’s earlier estimate in January.
The economic slowdown is widespread. In the United States, growth is expected to dip from 2.8% in 2024 to 1.6% in 2025 due to trade-related uncertainties and subdued private investment. The European Union is forecast to experience stagnation, maintaining a low growth rate of 1.0% amid declining net exports and trade challenges.
China, too, faces headwinds, with projected GDP growth of 4.6% in 2025 as the country grapples with sluggish consumer demand, manufacturing disruptions, and an ongoing real estate crisis.
While Pakistan’s projected growth of 2.3% is modest in comparison, it reflects cautious progress in the face of global economic instability. The continuation of structural reforms and sound macroeconomic management will be crucial in ensuring sustained recovery and resilience in the coming years.
