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Pakistan's growth forecast lowered to 2.6% due to floods, rising deficits, and inflation.
The World Bank has cut Pakistan’s fiscal year 2026 growth forecast to 2.6% from 3.4%, citing severe flash floods that damaged agriculture and disrupted food supplies.
Crop output in Punjab fell at least 10%, affecting wheat, rice, sugarcane, cotton, and maize.
Increased flood recovery spending is expected to raise the fiscal deficit to 5.5% of GDP and push inflation above 7%.
Despite a projected current account deficit of 0.1% of GDP, supported by remittances and lower oil prices, export losses and higher food imports pose risks.
Long-term recovery hinges on better revenue collection, agricultural revival, and fiscal discipline.
A new five-year reform plan aims to boost exports and growth.
Pakistan and the IMF are revising budget targets, while efforts continue to reduce default risk and stabilize the economy.
El pronóstico de crecimiento de Pakistán se redujo al 2,6% debido a las inundaciones, al aumento de los déficits y a la inflación.