Islamabad (Commerce Desk): The Asian Development Bank has released its latest economic outlook report on Pakistan, highlighting signs of improvement in the economy while also pointing out several ongoing risks.
According to the report, economic growth showed improvement during fiscal year 2025, while inflation recorded a notable decline. The bank stated that tight economic policies and reforms have supported the economy and laid the foundation for stability.
The Asian Development Bank forecasts Pakistan’s economic growth to reach 3.5% in 2026, with further improvement to 4.5% expected in 2027. The report describes the recovery of the industrial sector and an increase in private investment as positive indicators for the economy.
However, the report warns that tensions in the Middle East and rising oil prices could increase inflationary pressure. Inflation is projected to stand at 6.4% in 2026 and 6.5% in 2027.
According to the ADB, the State Bank of Pakistan may ease its cautious monetary policy, but rising energy and fertilizer prices could pose challenges, potentially affecting agricultural and industrial production.
The report also noted that increased private investment in 2026 will support economic growth, while the construction sector is expected to benefit from government incentives and recovery plans.
The Asian Development Bank emphasized that global uncertainty remains a major challenge for Pakistan’s economy, and sustained reforms along with prudent economic policies are essential for achieving long-term growth.
