ISLAMABAD: Pakistan’s economy is projected to grow by 2.7 percent in the fiscal year ending June 2025, the World Bank said on Wednesday, indicating signs of stabilization amid easing inflation and improved financial conditions.
The World Bank, in its latest report titled “Reimagining a Digital Pakistan,” said the real GDP growth is expected to benefit from a rebound in private consumption and investment, driven by easing inflation, lower interest rates and improving business confidence.
This improvement in Pakistan’s economy is supported by declining inflation, which fell to 1.5 percent in February, prompting the central bank to reduce its policy rate to 12 percent after a series of cuts totaling 1,000 basis points since June 2024.
Despite these positive indicators, the country faces significant external financing challenges, including over $22 billion in external debt repayments, highlighting the need for continued structural reforms and fiscal consolidation.
“Pakistan’s economy continues to stabilize and is expected to grow by 2.7 percent in the current fiscal year ending June 2025, up from 2.5 percent in the previous year,” the World Bank said.
It added that agricultural growth remained modest due to unfavorable weather conditions and pest outbreaks while industrial activity weakened due to rising input costs, increased taxation and cuts in government expenditure.
The report said growth in Pakistan’s services sector remained “muted” due to spillover effects from weak agricultural and industrial activity, which will make it challenging for the government to create jobs and reduce poverty.
“Pakistan’s key challenge is to transform recent gains from stabilization into economic growth that is sustainable and adequate for poverty reduction,” World Bank Country Director for Pakistan, Najy Benhassine, said.
“High-impact reforms to prioritize an efficient and progressive tax system, support a market-determined exchange rate, reduce import tariffs to boost exports, improve the business environment and streamline the public sector would signal strong reform commitment, build confidence, and attract investment.”
The report said real GDP growth was expected to rise to 3.1 percent in FY26 and 3.4 percent in FY27 due to the predicted ongoing macroeconomic stabilization and the implementation of key economic reforms.
“The April 2025 edition, Taxing Times, projects regional growth to slow to 5.8 percent in 2025 — 0.4 percentage points below October projections — before ticking up to 6.1 percent in 2026,” the World Bank said. “This outlook is subject to heightened risks, including from a highly uncertain global landscape, combined with domestic vulnerabilities including constrained fiscal space.”
World Bank projects 2.7 percent growth for Pakistan in FY2025
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World Bank projects 2.7 percent growth for Pakistan in FY2025
- Pakistan must convert stabilization into durable growth, says World Bank director
- Inflation drop to 1.5 percent in February supports signs of Pakistan’s economic recovery
Pakistan highlights Gwadar transshipment role as shipping routes face disruption over regional tensions
- Pakistani ports possess “untapped potential” to attract global shipping lines for transshipment operations, says minister
- Pakistan eyes leveraging Gwadar as regional transshipment hub as Iran’s closure of Strait of Hormuz disrupts global maritime trade
KARACHI: Pakistan’s Maritime Affairs Minister Junaid Anwar Chaudhry on Thursday highlighted the importance of the port city of Gwadar’s transshipment role as major shipping routes, including the Strait of Hormuz, face disruption due to Iran’s ongoing conflict with the US and Israel in the Gulf.
The meeting takes place as Iran has effectively closed the Strait of Hormuz, a strategic waterway that lies between it and Oman. It is one of the world’s most critical oil transit routes, with roughly 20 percent of global oil supplies passing through it. Iran has vowed it will attack any ship that enters the strait, causing energy prices to rise sharply on Monday amid disruptions to tanker traffic in the waterway.
Gwadar is a deep-sea port in Pakistan’s southwestern Balochistan province that lies close to the Strait of Hormuz. Pakistani officials have in the past highlighted Gwadar’s geostrategic position as the shortest trade route to the Gulf and Central Asia, stressing that it has the potential to become a regional transshipment hub.
Chaudhry chaired a high-level meeting of government officials to assess emerging logistical challenges facing Pakistan’s trade, particularly in the energy sector, amid tensions in the Gulf.
“Special focus was placed on fully leveraging the potential of Gwadar Port as a regional transshipment hub and positioning it as an alternative of regional instability,” Pakistan’s maritime affairs ministry said in a statement.
The minister said Pakistani ports possessed “significant untapped potential” to attract international shipping lines for transshipment operations, noting that it could also ensure long-term sustainability and growth of the country’s maritime sector.
Participants of the meeting discussed measures to strengthen Pakistan’s position as a viable alternative transit and transshipment destination, as key waterways are affected by the disruption.
The committee also reviewed proposals to amend relevant rules and regulations to facilitate international transshipment operations through on-dock and off-dock terminals.
The chairmen of the Port Qasim Authority, Karachi Port Trust and Gwadar Port Authority attended the meeting, briefing committee members on the current operational readiness of their ports. They spoke about the available capacity for container transshipment, bulk cargo handling and refueling services at Pakistani ports.
The port in Gwadar is a central part of the China-Pakistan Economic Corridor (CPEC), under which Beijing has funneled tens of billions of dollars into massive transport, energy and infrastructure projects in Pakistan.
Pakistan has long eyed the deep-sea port as a key asset that can help boost its trade with Central Asian states, the Gulf region and ensure the country earns valuable foreign exchange.
