ADB Revises Pakistan’s FY25 Growth Forecast Upwards

Pakistan’s gross domestic product (GDP) growth is projected to grow further by 3 percent in fiscal year 2025 compared to September’s forecast of 2.8 percent, according to the Asian Development Bank (ADB). For FY2024, growth is revised upwards to 2.5 percent, in line with the updated official estimate. Greater macroeconomic stability following the approval of the new IMF program under the Extended Fund Facility in September will support recovery. Industrial output growth is projected to accelerate with the suspension of import management measures, higher investor confidence, and easier access to foreign exchange. A more accommodative monetary policy because of faster-than-expected easing of inflationary pressures should further support economic activity through rebounding private investment. However, growth in agriculture is expected to weaken due to the heavy monsoon downpours during July–September 2024 and flood-like conditions in parts of the country. Wheat and cotton, two of Pakistan’s five major crops, are projected to perform poorly in FY2025.