ISLAMABAD: The Asian Development Bank (ADB) said on Friday that Pakistan’s economy has stabilised and is gaining momentum, though it continues to face significant risks from global uncertainty and domestic challenges.
In its latest Asian Development Outlook 2026 report, the ADB said Pakistan’s growth improved in fiscal year 2025 while inflation eased, supported by strict economic management and ongoing reform efforts.
The bank projected real GDP growth to rise to 3.5% in FY2026 and 4.5% in FY2027, compared with 3.1% in FY2025, driven by recovery in manufacturing and increased investment.
ADB Country Director for Pakistan Emma Fan said the economy has shown “stronger momentum,” but warned that sustained reforms are essential to maintain stability and strengthen buffers against external shocks.
The report cautioned that a prolonged Middle East conflict could raise energy and fertilizer costs, weaken production, and pressure Pakistan’s external accounts. Inflation is also expected to remain elevated around 6.4% in FY2026 and 6.5% in FY2027.
Despite the positive outlook, the ADB stressed that continued policy discipline and structural reforms are critical for long-term and inclusive economic growth.
