IMF raises Pakistan's FY27 inflation forecast to 9.9%, keeps growth projection at 3.5%

Profit by Pakistan Today reports that the International Monetary Fund has lifted its inflation forecast for Pakistan in FY2026-27 to 9.9%, up from 8.4%. That revised figure sits above the government's 8.2% target, and the Fund has kept its 3.5% growth forecast below the official 4% goal. The estimates appear in the Fund's latest World Economic Outlook, published on a Tuesday at the joint annual meetings with the World Bank.

Growth expectations diverge too, as the Fund left its projection unchanged while Finance Minister Muhammad Aurangzeb expects expansion above 4%. Authorities keep passing higher fuel costs to consumers, with a monthly payout of Rs2,000 to motorcycle owners and Rs3,000 to people with small cars. The IMF has called that relief scheme broad-based and costly, and the higher inflation outlook could add pressure on policymakers to keep interest rates restrictive.

The current account deficit projection also rose to 1% of GDP, roughly $4.4 billion, about $450 million above the earlier estimate. Globally, the Fund expects world growth of 3.1% for 2026, rising to 3.4% for 2027, while Middle East and Central Asia growth slows to 0.3% in 2026. The Fund also warned that weaker energy inventories, geopolitical tensions and supply disruptions could weaken resilience and push inflation higher.