United Nations, May 16, 2025: Pakistan’s economy is projected to grow by 2.3 percent in 2025, marking a moderate recovery following a period of economic contraction, according to the UN World Economic Situation and Prospects 2025 report released on Thursday.
The report highlights stabilizing trends in Pakistan’s economy amid continued fiscal consolidation and reforms under the IMF-supported program. It also credits declining inflation across South Asia for allowing central banks in the region, including Pakistan’s, to ease monetary policy in 2025.
Despite a global economic downturn, South Asia’s growth outlook remains relatively strong, with GDP growth forecast at 5.7 percent in 2025 and 6.0 percent in 2026. This regional performance is being driven largely by India’s momentum and a rebound in economies such as Nepal, Bhutan, Sri Lanka, and Pakistan.
However, the global economic outlook appears bleak. The UN report warns of heightened trade tensions, increased tariffs, and policy uncertainty that are disrupting supply chains and undermining investment. Global GDP growth is projected at just 2.4 percent in 2025, down from 2.9 percent in 2024 and below earlier projections.
Major economies are also expected to slow down. US growth is forecast to fall to 1.6 percent in 2025 from 2.8 percent in 2024, amid rising tariffs and economic uncertainty. The European Union is projected to grow by just 1.0 percent, while China’s economy is expected to decelerate to 4.6 percent, affected by weak consumer sentiment and persistent challenges in manufacturing and the property sector.
The report underscores the risks posed by geopolitical instability, high debt levels, and sluggish productivity, calling for coordinated international efforts to address structural vulnerabilities and stimulate sustainable economic growth.
