The International Monetary Fund (IMF) has reduced Pakistan’s growth expectations to 2.6 %, due primarily to the impact of the high American tariffs. This amendment follows the introduction of customs tariffs to almost all commercial partners by the United States, which includes a 29 % tariff on Pakistani exports. While this may create immediate challenges, economists suggest that it may provide some long -term opportunities.
Earlier in January, the International Monetary Fund reviewed the estimate of Pakistan’s growth to 3 % for the fiscal year, a decrease from the initial projection of 3.2 %. The last expectations are now 2.6 % for the current fiscal year and 3.6 % for the other. The inflation is expected to reach 5.1 % for the current fiscal year, as it rose to 7.7 % the following year.
The Pakistani Institute for Development Economy (PIDE), a state -owned research tank, warned that these increasing definitions can disrupt the export sector in Pakistan strongly, which may lead to macroeconomic instability, significant losses in jobs, and a sharp decrease in foreign exchange profits.
On the global scale, the International Monetary Fund has also reduced its growth expectations, reduced 0.5 percentage points to 2.8 % for 2025. The International Monetary Fund warned that increasing commercial tensions will continue to influence global economic activity, including in Pakistan, where continuous tariff issues constitute a major concern. The most prominent economists of the International Monetary Fund, Pierre Olivier Gurinchas, that escalating trade conflicts can lead to more certainty and volatility in the financial markets and the most strict financial conditions in the world.
For Pakistan, the high trade tariffs emphasize the need for economic diversification. The International Monetary Fund report confirms that important structural reforms are necessary to confront these challenges and reduce dependence on weak sectors such as exports.