Pakistan’s economy has grown by three per cent in the fiscal year 2025 (FY25), according to a new report by the World Bank (WB). However, the report warns that the country’s growth is expected to stay slow next year because of the recent floods that caused heavy losses.
Earlier this month, the World Bank revised its forecast for Pakistan’s economic growth, cutting it from 3.1% to 2.6%. The main reason behind this change is the destruction caused by floods, which have not only damaged crops and infrastructure but also pushed up inflation to nearly 7.2%.
In its earlier outlook released in April 2025, the bank had predicted stronger growth, but the recent natural disaster forced it to lower expectations. For the upcoming fiscal year 2025–26, the World Bank now expects the country’s real GDP growth to remain close to 2.6%, showing no major improvement.
Pakistan’s own economic target was set at 4.2%, and later adjusted to 3.5% during its talks with the International Monetary Fund (IMF). Despite these efforts, the overall recovery seems slower than planned.
The World Bank Country Director for Pakistan, Bolormaa Amgaabazar, said that the floods have brought major human suffering and economic challenges. She added that the disaster has weakened Pakistan’s growth prospects and increased pressure on the country’s macroeconomic stability.
Overall, the report paints a mixed picture showing slight growth but warning of continued challenges. Pakistan now faces the difficult task of rebuilding after the floods, controlling inflation, and stabilizing its economy to achieve better results in the coming years.