The Asian Development Bank’s latest report has estimated Pakistan’s economy to grow by 3%, and inflation to remain under 6%, during the current fiscal year.
The Asian Development Outlook (ADO) July 2025 report released on Wednesday notes that Pakistan’s economy provisionally grew by 2.7% in FY2025, resulting in the slight upward revision for FY2025, while the growth forecast for FY2026 remains unchanged.
The revised growth forecast for Pakistan accounts for the higher-than-expected uptick in the industry and services sector, amidst expected declines in agricultural output. It notes that the accelerated decline in food and non-food prices for the first 11 months of FY2025 revised the inflation forecast for FY2025 downward, while the outlook for FY2026 remains unchanged.
In its April report, the ABD had projected 3% economic growth and 5.8% inflation rate for the current fiscal year.
The report said the regional economy was expected to grow by 4.7% this year, down 0.2% from its April forecast. The 2026 outlook has also been trimmed to 4.6%, from the earlier estimate of 4.7%.
“Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB Chief Economist Albert Park. “Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth.”
The report warns that the region’s economic prospects could worsen if U.S. tariffs escalate or if global trade tensions intensify. Other downside risks include geopolitical conflicts that may disrupt supply chains and raise energy prices, along with further deterioration in China’s property market, which remains a critical pressure point for the region.