UNITED NATIONS: Pakistan’s economy is poised for moderate growth in 2025, with the United Nations projecting a 2.3% expansion in GDP, marking a potential turnaround after a period of economic contraction.
The forecast was published in the UN’s flagship economic report, World Economic Situation and Prospects 2025, which outlines a cautiously optimistic trajectory for Pakistan’s economy amid a complex global backdrop of rising trade tensions and slowing growth.
“Pakistan is expected to experience moderate growth, stabilizing after a period of economic contraction,” the report states.
Regional Recovery, Reform Momentum
The report highlights that declining inflation across South Asia has enabled several central banks in the region—including Pakistan’s—to initiate or continue monetary easing throughout 2025. In parallel, Pakistan, Bangladesh, and Sri Lanka are projected to pursue fiscal consolidation and structural reforms under IMF-supported programs.
South Asia as a whole is expected to post robust growth of 5.7% in 2025 and 6.0% in 2026, primarily driven by India’s strong economic performance and recoveries in Bhutan, Nepal, and Sri Lanka.
Pakistan’s Outlook: Stabilization and Reform
For Pakistan, the 2.3% GDP growth projection signals a gradual path to stabilization, supported by economic reform commitments, controlled inflation, and ongoing engagement with the International Monetary Fund (IMF). These reforms are designed to address deep-rooted fiscal imbalances and unlock long-term economic potential.
While challenges persist—including high public debt, limited investment, and sluggish productivity—the report emphasizes that continued reform measures could strengthen macroeconomic fundamentals and investor confidence.
Global Risks: Trade Tensions and Policy Uncertainty
Globally, the economic outlook has weakened. The report warns that intensified trade conflicts, particularly a surge in tariffs led by major economies, are raising production costs, disrupting supply chains, and exacerbating financial turbulence.
As a result, global GDP growth is now forecast at 2.4% in 2025, down from 2.9% in 2024, and 0.4 percentage points lower than the UN’s previous forecast in January.
“The global economy is at a precarious juncture, marked by heightened trade tensions and elevated policy uncertainty,” the UN report cautions.
Looking Ahead
Despite modest figures, Pakistan’s projected rebound is a sign of resilience and reform-led recovery. With international support, particularly through multilateral financial institutions, and an improving inflationary environment, the country has the opportunity to navigate its economic headwinds and lay a stronger foundation for future growth.
