IMF sees Pakistan inflation at 9.9% in FY27 and growth of 3.5%: what the October outlook means for you

The International Monetary Fund expects Pakistan's inflation to climb to 9.9% in fiscal year 2026-27, up from 7.1% in the year that ended in June, according to its October 2026 World Economic Outlook released in Bangkok on Tuesday, 13 October. The IMF Pakistan inflation forecast comes with weak growth: GDP is projected to grow 3.6% in FY26 and 3.5% in FY27, as first reported by Business Recorder.

The IMF's numbers for Pakistan

The IMF reports Pakistan on a fiscal-year basis, so "2027" in its tables means July 2026 to June 2027, the year we are in now.

Why prices are expected to rise

The outlook is shaped by the war around Iran and the closure of the Strait of Hormuz. The IMF's base case assumes oil averages $96 a barrel in 2026 and $87 in 2027, with Hormuz reopening in March 2027. In its worse case, oil stays near $130 into early 2027 and global inflation is 1.1 points higher. Pakistan imports most of its fuel, so oil feeds straight into petrol, diesel, electricity and transport fares.

The forecast is already close to what households are seeing. Consumer prices rose 10.3% year on year in September 2026, down from 11.1% in August (see the CPI inflation page). The State Bank's policy rate stands at 11.5% (policy rate), so an average of 9.9% for the year would leave a real interest rate of under two points.

The rest of the world

• Global growth: 3.1% in 2026 (up from 3.0% in July's forecast) and 3.4% in 2027. Global inflation 4.7% in 2026 and 4.1% in 2027.
• India: 7.0% in both 2026 and 2027, raised by 0.6 and 0.3 points.
• China: 4.5% in 2026 and 4.0% in 2027.
• United States: 2.3% in both years.
• Gulf: the hardest hit. Saudi Arabia is now expected to shrink 3.3% in 2026 (July's forecast was growth of 1.7%), the UAE by 3.9%, Qatar by 15.6% and Kuwait by 16.7%, Al Jazeera reported from the IMF's regional tables. That matters here: the Gulf employs millions of Pakistanis and is the largest source of remittances.

The IMF's chief economist, Silvana Tenreyro, said the global economy "has been resilient, but that resilience is reaching its limits" and that governments "need to restore fiscal space".

What it means for you

• Salaries: a 9.9% average price rise means a salary that does not grow by about 10% this year buys less. Run your numbers through the salary increment calculator, which also shows the tax on a raise.
• Loans: with inflation near the policy rate, a cut in borrowing costs looks unlikely soon. Check what a car or home loan costs at today's rates with the car loan calculator or the home loan calculator.
• Fuel: daily prices are on the petrol price page.

Finance Minister Muhammad Aurangzeb is in Bangkok for the IMF and World Bank annual meetings from 12 to 18 October, where the outlook will frame Pakistan's talks with lenders.