Pakistan’s economy is expected to grow by 2.5% in fiscal year 2025, according to the Asian Development Bank (ADB). This growth is similar to the previous year, reflecting the impact of macroeconomic policies and reforms. The ADB’s April 2025 report states that Pakistan’s growth rate is projected to rise to 3.0% in fiscal year 2026. This positive outlook is supported by ongoing economic reforms and a stable macroeconomic environment.
The ADB credits the International Monetary Fund’s (IMF) Extended Fund Facility (EFF), which began in October 2024, for helping stabilize Pakistan’s economy. The successful implementation of reforms in areas like tax policy and energy sector efficiency has boosted macroeconomic stability. The ADB emphasized that continued adherence to the economic adjustment program is crucial for sustained and inclusive growth.
Private sector investment is expected to drive growth in FY2025, supported by progress in reforms and a stable foreign exchange market. Both the industrial and services sectors will benefit from recent monetary easing and improved stability. Strong remittance inflows, lower inflation, and favorable global commodity prices will help support overall demand and economic activity.
Inflation is projected to decrease significantly to 6.0% in FY2025, with a further decline to 5.8% in FY2026. This is due to moderating food inflation, stable global oil prices, and improved domestic conditions. The ADB also highlighted the importance of increasing female labor force participation, which could further boost productivity and economic output.