Pakistan Stuck In Economic Slowdown For 5th Year, World Bank Slashes 2025–26 Growth Forecast To 2.6% Amid Rising Poverty & Weak Reforms

New Delhi: Pakistan’s economy is in serious trouble, with the World Bank forecasting only 2.6 percent GDP growth for 2025–26. This would mark the fifth year in a row where growth remains below 3 percent, showing no signs of a strong recovery.

Experts Call It the Worst Four-Year Period in History

Economist Asad Ali Shah and former Finance Minister Miftah Ismail both say this is one of the worst periods in Pakistan’s economic history.

FY23: Growth at –0.2 percent

FY24: 2.5 percent

FY25: 2.7 percent

FY26 (projected): 2.6 percent

These low numbers show deep and ongoing economic problems.

What’s Causing the Crisis?

Several issues are hurting Pakistan’s economy:

- High inflation and interest rates

- Collapse in investment and business confidence

- Heavy floods that damaged farms and food supply

Government delays in key reforms

Economists say the government is trying to “buy stability” by keeping interest rates and taxes high — but this has only slowed growth and increased joblessness.

Rising Poverty and Unemployment

With such slow growth, more people are losing jobs and falling into poverty. Prices for food and fuel had cooled a bit, but floods have again disrupted food supply, which could raise inflation again through 2027.

Stability Is Not Success

Asad Shah warned that the economy may look stable now, but it’s far from healthy. He said industrial output is still weak, agriculture is in crisis, and no new jobs are being created.

Without strong reforms and a focus on exports, investment, and governance, he warns that Pakistan could enter a phase where slow growth becomes the “new normal.”

Pakistan needs urgent economic reforms to avoid long-term damage. Without action, the country risks being stuck in a cycle of low growth, high unemployment, and increasing poverty.