Pakistan’s current account deficit is projected to widen in fiscal year 2026–27, according to the World Bank’s latest Global Economic Prospects report. The report notes that rising imports alongside a normalization of remittances could increase pressure on external financing.
The World Bank has forecast Pakistan’s economic growth at 3 percent in the current fiscal year, below the government’s target of 4.2 percent and 0.1 percentage points lower than its June 2025 projection. Growth is expected to improve slightly to 3.4 percent in FY27. Agricultural recovery following recent floods and reconstruction efforts is likely to support economic activity, while easing food prices have contributed to lower inflation, despite cautious monetary policy and recent interest rate cuts.
On the trade front, the report highlighted risks from higher US tariffs, trade sanctions, and policy uncertainty, which could affect Pakistan’s exports and the regional economy. It also emphasized that private sector reforms could boost employment and economic growth, noting early signs of recovery such as increased industrial activity and higher bank lending.
Globally, the World Bank described the economic environment as more stable than expected, though growth remains subdued, with projections of 2.6 percent in 2026 and 2.7 percent in 2027. The report also cautioned that the gap in living standards between developing and advanced economies continues to widen.
