GDP Growth to Rise to 3%, Inflation to Drop to 5.8% by FY26: ADB

The Asian Development Bank has projected Pakistan’s GDP to grow by 2.5 percent in fiscal year 2025 and then by 3 percent in FY2026. Meanwhile, it expects inflation to drop sharply to 6 percent this fiscal year and 5.8 percent in FY26. According to ADB’s Asian Development Outlook April 2025, the current growth trajectory reflects early signs of stability and recovery driven by the consistent implementation of reforms and tight macroeconomic policies. The bank attributes the improving outlook to Pakistan’s adherence to the IMF’s Extended Fund Facility program initiated in October 2024. Reform momentum in areas such as tax policy and energy sector restructuring has contributed to macroeconomic stability. Growth in the industrial and services sectors is expected to benefit from recent monetary easing and an improved business environment. ADB said robust remittance inflows and declining inflation are likely to support aggregate demand. Meanwhile, the average inflation rate is expected to fall to 6 percent in FY2025 and further to 5.8 percent in FY2026. This decrease is attributed to moderating food prices, stable global commodity markets, subdued domestic demand, and a favorable base effect.