Pakistan’s GDP growth to remain modest at 2.6% in FY26 amid flood impact: World Bank

Pakistan’s economy is projected to grow modestly by 2.6% in FY2025-26, as catastrophic floods weigh on agricultural output and inflation pressures resurface, noted the latest World Bank economic report on the Middle East, North Africa, Afghanistan & Pakistan (MENAAP) on Tuesday. “In Pakistan, real GDP at factor cost is expected to have grown by 2.7% year-on-year in FY 2024/25, slightly above FY 2023/24’s 2.5 % expansion. For FY 2025/26, real GDP growth is projected to remain around 2.6%, as ongoing catastrophic floods have damped the forecast,” read the report. The World Bank shared that early estimates suggest a drop of at least 10% in agricultural output in Punjab, affecting major crops such as rice, sugarcane, cotton, wheat, and maize. “For FY 2026/27, growth is expected to accelerate to 3.4%, supported by higher agricultural output, lower inflation and interest rates, recovering consumer and business confidence, and a rebound in private consumption and investment.