Lahore School's Quarterly Report Featured in The Express Tribune

As reported by The Express Tribune, a new quarterly report by economists Dr. Moazam Mahmood and Dr. Azam Amjad Chaudhry of the Lahore School of Economics’ Modelling Lab issues grave warnings regarding Pakistan's economic outlook. The authors reveal that GDP growth for fiscal year 2025-26 stands at 3.1%, undershooting targets by the government, IMF, and ADB, and warn it could drop to a "force majeure" rate of 2.8%. This stagnation is primarily driven by a brutal global energy shock and rising inflation, which has hit 9%.

The assessment emphasizes that Pakistan’s heavy reliance on imported oil, costing $13 billion annually, has amplified these external shocks. With global oil prices running $25 to $30 above trend, elevated import bills have pushed the current account back into deficit. This energy crisis directly fuels inflation; consumer energy prices spiked drastically between June 2025 and June 2026, including a 54% rise in petrol and a 126% surge in natural gas. Alarmingly, researchers noted that two-thirds of these hikes stem from government taxation, making the state directly responsible for a third of the overall inflation rate.

This economic pressure has caused a severe reversal in poverty reduction trends, with extreme caloric poverty jumping from 16.5% in FY2018-19 to 21.1% by FY2024-25 due to low growth and past currency depreciations. While the report credits the government for stabilizing the rupee and curbing peak inflation, it cautions that defending the exchange rate is insufficient to protect the millions unable to meet basic caloric needs. Despite short-term bright spots like a 3% recovery in agriculture and a 6% surge in manufacturing, the research concludes that these are not structural fixes, highlighting an urgent call for a fundamental pivot toward proactive policies that revive sustainable, long-term growth.