ISLAMABAD: The Asian Development Bank (ADB) has forecast Pakistan’s economic growth to remain modest at 2.5 percent in the current fiscal year (FY25), with a slight improvement to three percent expected in the fiscal year 2026, according to a report released on Wednesday. In December last year, the institution had predicted three percent growth for FY25.
The multilateral lender noted that while inflationary pressures are easing – with consumer prices projected to average six percent this year and dip further to 5.8 percent next year – structural reforms and macroeconomic stability measures remain critical for sustained recovery.
The report highlighted that Pakistan’s economic stabilisation efforts, particularly through the ongoing IMF Extended Fund Facility programme, have started yielding positive results. Fiscal adjustments in tax policies and energy sector reforms have contributed to improved economic fundamentals, the ADB observed.
ADB revises Pakistan’s growth forecast to 3 per cent for 2025
The bank has however cautioned that growth prospects remain contingent on continued implementation of tough macroeconomic policies and structural reforms. A combination of factors including increased private sector investment, stable remittance inflows, and moderated global commodity prices – particularly for oil – are expected to support Pakistan’s economic recovery in the near term.
The ADB report noted Pakistan has continued to underperform in female labour force participation compared to other regional countries. Targeted investments in women’s education and vocational training could significantly enhance productivity and economic output, implying that skill development aligned with market needs could create better employment opportunities for women.
While the projections indicate gradual economic stabilisation, analysts suggest that achieving higher growth trajectories will require deeper structural reforms, particularly in broadening the tax base and improving the business climate to attract sustained investment.