ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold

KARACHI: Pakistan’s economy is expected to grow by 2.5% in the current fiscal year, supported by ongoing reforms and improved macroeconomic stability, the Asian Development Bank (ADB) said on Wednesday.
Pakistan has undertaken stringent economic reforms following a prolonged financial crisis that forced it to seek loans from the International Monetary Fund (IMF) over the past two years.
Since then, macroeconomic indicators have improved significantly, though the government acknowledges the need for further consolidation through policies aimed at boosting exports and attracting investment.
ADB’s flagship economic publication, the Asian Development Outlook, also maintained in its April edition the country’s economic position has strengthened under the IMF program.
“Pakistan’s economy has benefitted from improved macroeconomic stability through robust reform implementation in areas such as tax policy and energy sector viability,” said ADB Country Director for Pakistan Emma Fan. “Sustained implementation of policy reforms is vital to buttress this growth trajectory and fortify fiscal and external buffers.”
The Manila-based lender said, “Pakistan’s real gross domestic product (GDP) is expected to grow by 2.5% in FY2025, the same growth rate from FY2024.”
It also projected growth to rise to 3% in FY2026.
The report noted average inflation was expected to decline significantly to 6% in FY2025 and further to 5.8% in FY2026.
However, it warned that female labor force participation remained low in Pakistan compared to regional and peer countries, adding that enabling more women to work outside the home could boost productivity and output while advancing female empowerment.