Pakistan’s current account deficit is expected to widen in fiscal year 2026–27, according to the World Bank’s latest Global Economic Prospects report.
WB said this happens when imports rise and remittances return to normal levels which may put external financing pressures.
Alongside external risks, the World Bank projected Pakistan’s economic growth at 3 percent in the current fiscal year, below the government’s 4.2 percent target.
The estimate is 0.1 percentage points lower than the World Bank’s June 2025 projection. Growth is expected to improve to 3.4 percent in FY27.
The report said agricultural recovery following recent floods and reconstruction activities is likely to support economic activity. It also noted that inflation has eased, mainly due to lower food prices, though monetary policy remains cautious despite recent interest rate cuts.
On the trade front, the World Bank warned that higher US tariffs could hurt Pakistan’s exports, while trade sanctions and policy uncertainty may negatively affect the regional economy.
Private sector reforms could help boost employment and economic growth. It also pointed to early signs of recovery, including increased industrial activity and higher bank lending.
At the global level, the World Bank said the economy is more stable than expected, but growth remains subdued. Global growth is projected at 2.6 percent in 2026, rising slightly to 2.7 percent in 2027.
The report also warned that the living standards gap between developing and advanced economies continues to widen.
