Pakistan pursues economic reforms amid IMF inflation forecasts

Pakistan's Finance Minister Muhammad Aurangzeb has outlined various economic reform strategies and growth forecasts during the IMF and World Bank annual meetings in Bangkok. While the government expects economic growth to exceed 4% for the upcoming fiscal year, the International Monetary Fund (IMF) maintains a more conservative GDP growth forecast of 3.5% for the current fiscal year.

The IMF's World Economic Outlook projects that Pakistan's inflation rate will rise to 9.9% in the 2026-27 fiscal year, up from 7.1% in the previous period. Despite these inflationary pressures, the IMF anticipates the unemployment rate will decline to 6.5% in FY2026-27.

To bolster the economy, Aurangzeb is pursuing several initiatives, including the privatization of five to six state-owned entities, which could generate over $1 billion. He is also discussing a proposed $10 billion exchange stabilization facility with the United States and seeking to broaden the tax base through measures such as agricultural income tax and digital enforcement. Additionally, Aurangzeb has called for reforms to the global financial architecture to better support developing nations facing climate risks and trade fragmentation.