The Asian Development Bank (ADB) has revised its GDP growth forecast for Pakistan for FY2025 to 2.7%, citing stronger-than-expected performances in the industrial and services sectors. The revised forecast, detailed in the ADB’s Asian Development Outlook (ADO) July 2025 report, comes as the country’s economy shows resilience despite expected declines in agricultural output.
According to the ADB, “Pakistan provisionally grew 2.7% in FY2025 (ended 30 June 2025), resulting in the slight upward revision for FY2025, while the growth forecast for FY2026 is unchanged.” The revised growth forecast in Pakistan accounted for the higher-than-expected uptick in the industry and services sector, even as the expected declines in agricultural output came to pass.
In addition, the ADB has revised Pakistan’s inflation forecast downward for FY2025. The report noted that easing price pressures, particularly in food and non-food items, contributed to the decline in the inflation forecast. The outlook for FY2026 inflation remains stable.
“In Pakistan, the accelerated decline in food and nonfood prices for the first 11 months of FY2025 revised the inflation forecast for FY2025 downward, while the outlook for FY2026 remains unchanged,” read the report.
For the broader region, the ADB has lowered growth projections for developing Asia and the Pacific due to a reduction in exports, global trade uncertainties, and weaker domestic demand. The region’s economic growth is now projected at 4.7% for FY2025, down from 4.9% previously, with the forecast for FY2026 also lowered to 4.6%.
The ADB highlighted that escalating US tariffs and trade tensions, geopolitical risks, and global supply chain disruptions could further strain the region’s economic prospects.
Regarding South Asia, the growth outlook for FY2025 has been slightly adjusted down to 5.9%, primarily due to the impact of US trade policies on key economies like India and Sri Lanka.
