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flag Pakistan's economy faces renewed deficit pressures, with a projected $0.6B current account gap and inflation rising due to external debt and weak reforms.

flag Pakistan's economy is slipping back into deficit, with the Lahore School of Economics projecting 2.4% GDP growth for FY 2025-26 and a current account deficit reaching $0.6 billion in the first quarter—reversing last year’s $2 billion surplus. flag The report cites reliance on external financing, poor import management, and structural weaknesses as key causes, warning that inflation could hit 7.1% due to high energy costs and exchange rate instability. flag Despite modest gains in agriculture and manufacturing, growth is unlikely to exceed 2.9%, falling short of targets. flag The LSE urges urgent reforms, including liberalizing investment goods imports and restricting luxury imports, to stabilize the economy and restore confidence.

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