FY 2025-26: Pakistan’s economy to grow 2.5pc, forecasts ADB

The Asian Development Outlook (ADO) said that Pakistan’s economy is showing signs of stability and recovery with growth in FY2025 (ending 30 June 2026),

The ADO April 2025, which is the Asian Development Bank’s (ADB) annual flagship economic publication said that Islamabad’s real gross domestic product (GDP) is expected to rise by 2.5 per cent in FY2025, the same growth rate from FY2024.

The bank said that the country’s growth is projected to grow up to 3.0 per cent in FY2026.

It added the growth outlook is being helped by a more stable macroeconomic position helped by the IMF Extended Fund Facility arrangement, which began in October 2024.

ADB Country Director for Pakistan Emma Fan said that Islamabad’s economy has benefitted from improved macroeconomic stability.

She added that the growth is projected to persist this year and to increase in 2026. She further said that sustained implementation of policy reforms is vital to buttress this growth trajectory.

Growth, in FY2025, is likely to be driven by a rebound in private sector investment.

The successful implementation of the reform program is anticipated to continue.

Economic activity in both the service and industrial sectors will benefit from recent monetary easing and macroeconomic stability.

Additionally, lower inflation, strong remittance inflows, and monetary easing are likely to support aggregate demand.