Economists warn Pakistan risks prolonged economic stagnation as growth outlook dims

Pakistan risks locking itself into a prolonged phase of economic stagnation, warned economist Asad Ali Shah, as the World Bank’s latest update projects growth at just 2.6% for FY25-26 — following a dismal four-year stretch of weak performance. Expressing his views on the social media platform X, Asad, the former president of the Institute of Chartered Accountants Pakistan (ICAP), said: “The World Bank’s latest Pakistan Development Update has revised down the FY25-26 growth forecast to just 2.6%, compared to the government’s more optimistic projection of around 4%. “This comes after three years of dismal performance — -0.2% in FY23, 2.5% in FY24, and 2.7% in FY25 — marking what is arguably the worst four-year stretch in Pakistan’s economic history, defined by sustained low growth, record inflation and interest rates, and a collapse in investment confidence.”