• World Bank cuts forecast by 0.5pc, predicts inflation may shoot to 7.2pc; exports to decline 1.5pc
• WB official says removing barriers to women’s participation in job market can boost GDP per capita by 20-30pc

ISLAMABAD: The World Bank on Tuesday cut its growth forecast for Pakistan by half a per cent to 2.6 per cent for the current fiscal year due to the recent floods, which are also expected to push up inflation to 7.2 per cent.

“For FY 2025/26, real GDP growth is projected to remain around 2.6pc, as ongoing catastrophic floods have damped the forecast,” the Washington-based lending agency said in its regional economic outlook for the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region.

The bank had earlier projected a 3.1pc growth rate for the country in its previous biannual outlook in April 2025. Pakistan had set 4.2pc growth target and has since been looking at 3.5pc as part of its IMF engagements.

“Early estimates suggest a drop of at least 10 per cent in agricultural output in Punjab, affecting major crops such as rice, sugarcane, cotton, wheat, and maize,” it said. “For FY 2026/27, growth is expected to accelerate to 3.4pc, supported by higher agricultural output, lower inflation and interest rates, recovering consumer and business confidence, and a rebound in private consumption and investment,” it said.

Looking ahead, Pakistan, which had historically maintained high tariffs with a complex structure, stands to benefit in terms of........

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