Washington, Jan 13 Pakistan’s economy is expected to remain largely stagnant, with growth hovering around 3 per cent, as structural weaknesses and climate shocks continue to weigh on activity, the World Bank said on Tuesday.
The World Bank estimates Pakistan’s economy grew 3.0 per cent in FY2024-25 and projects growth to remain at 3.0 per cent in FY2025-26, before edging up modestly to 3.4 per cent in FY2026-27, according to its latest Global Economic Prospects report.
The report said recent growth was supported by stronger industrial activity. This followed a relaxation of import restrictions and an expansion of bank credit.
However, gains were offset by weaker agricultural output. The World Bank said farm production was dampened "partly due to a series of floods in 2025".
Pakistan is grouped within the Middle East, North Africa, Afghanistan, and Pakistan region, where overall growth is expected to strengthen. But the report said prospects vary widely across economies.
For Pakistan, the outlook remains constrained by structural challenges, climate risks and fiscal pressures.
The World Bank said recovery in agriculture and reconstruction following last year’s floods is expected to provide some support going forward. Even so, growth remains well below the levels needed to significantly raise incomes or absorb population growth.
The report warned that public debt levels across emerging and developing economies are at their highest in more than half a century, limiting governments’ ability to support growth.
"With public debt in emerging and developing economies at its highest level in more than half a century, restoring fiscal credibility has become an urgent priority," said M. Ayhan Kose, the World Bank Group’s Deputy Chief Economist.
He said fiscal rules can help stabilise debt and rebuild buffers, but stressed that outcomes depend on "credibility, enforcement, and political commitment".
Pakistan’s economy has faced repeated shocks in recent years, including floods, balance-of-payments pressures and policy instability, which have slowed investment and growth.
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