ISLAMABAD: The World Bank has projected Pakistan’s economic growth at 3.8% in 2027, while warning that inflation could rise to 8.2% during the year. The forecast remains below the government’s 4% growth target.
The projection was included in the World Bank’s latest Middle East, North Africa, Afghanistan and Pakistan Economic Update, which assesses the region’s economic outlook amid continuing global and regional challenges.
According to the report, Pakistan’s economy is expected to expand by 3.7% in fiscal year 2025-26, compared with 3.2% in FY2024-25. Services, manufacturing and livestock are expected to support economic activity despite higher import and transportation costs.
However, inflation remains a major concern. The World Bank expects consumer-price inflation to increase from 7.1% in 2026 to 8.2% in 2027. Rising energy, food and freight costs could add further pressure to household budgets and businesses.
The bank also projected Pakistan’s real per-capita GDP growth at 2.2% in 2027, up slightly from 2.1% in 2026. Meanwhile, the current-account deficit is expected to widen to 0.8% of GDP, while the fiscal deficit could reach 3.5% of GDP.
The World Bank noted that Pakistan remains vulnerable to external shocks, including higher energy prices and climate-related risks. It also highlighted the country’s significant share of extreme poverty within the wider MENAAP region.
The report stressed that targeted assistance could help protect vulnerable households while preserving Pakistan’s limited fiscal space.
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