ISLAMABAD: Pakistan’s economy is expected to expand by a modest 3.5 per cent in 2026, as implementation of the reform programme under the IMF remains robust, with economic recovery on track, says the ‘World Economic Situation and Prospects 2026’ published by the United Nations.

The report, released by the United Nations Department of Social Affairs (DESA) and made available to Dawn on Friday, notes that the current account posted a surplus for the FY25, the fiscal primary balance exceeded targets, inflation remained contained, and external buffers strengthened.

However, adverse shocks like the recent floods pose significant threats to economic and development progress, increasing risk to economic growth, fiscal consolidation and poverty reduction efforts, the report fears.

Published in Dawn, January 10th, 2026