Washington, 14 April 2026: The International Monetary Fund in its World Economic Outlook 2026 report has warned that escalating geopolitical tensions, particularly the ongoing Middle East conflict, are weighing heavily on global economic stability and slowing growth momentum.
The IMF revised its global growth forecast downward from 3.6% to 3.4%, citing disruptions in energy supply chains, heightened uncertainty in financial markets, and prolonged regional instability.
The report stated that global economic prospects remain increasingly vulnerable to geopolitical fragmentation, with war-driven risks now playing a decisive role in shaping future outlooks.
The IMF projected Pakistan’s economic growth at 3.6% for the current fiscal year, slightly below the government’s target of 4.2%, indicating possible shortfalls in achieving planned macroeconomic goals.
Inflation is expected to remain under pressure, with projections showing 7.2% for the current fiscal year, rising further to 8.4% in the next fiscal year, compared to 4.5% recorded last year. The report noted a renewed upward trend in consumer prices.
However, the IMF also forecast a gradual improvement in labour market conditions, with unemployment expected to decline from 7.1% to 6.9%, and further to 6.5% in the following year.
The current account deficit is projected at 0.4% of GDP, widening to 0.9% in the next fiscal year, reflecting external sector pressures.
The IMF emphasized that energy disruptions and global instability are key risks affecting Pakistan’s economic outlook.
The IMF urged countries to reassess economic priorities and adopt stronger resilience strategies as geopolitical tensions continue to disrupt global trade and energy flows.
The report highlighted that the duration and intensity of the Middle East conflict will play a critical role in determining the future direction of the global economy.
