ADB keeps Pakistan’s growth forecast at 3%, inflation 5.8%
The Asian Development Bank (ADB) has maintained its economic growth and inflation forecasts for Pakistan for the current fiscal year, reported 24NewsHD TV channel.
According to the latest Asian Development Outlook report released on Wednesday, the ADB has kept Pakistan’s GDP growth estimate at 3% for the fiscal year, showing no change from its earlier forecast. This is lower than the federal government’s growth target of 4.2% for the same period.
Similarly, the ADB has also retained its inflation projection at 5.8%, which is below the government’s target of 7.5% average inflation for the ongoing year.
The regional bank had previously published its economic projections for Pakistan in April 2025. The latest update reaffirms those earlier figures, suggesting a cautious outlook on Pakistan’s economic recovery amid domestic and global challenges.
The report reflects ADB’s view that while there may be signs of economic improvement, the pace of recovery will likely remain modest, and inflation could stay within manageable limits if current trends continue.
Moreover, the Asian Development Bank (ADB) has approved a major $800 million program aimed at strengthening Pakistan’s financial sustainability and improving public financial management.
According to a statement from the Manila-based lender, the package includes a $300 million policy-based loan as part of the second phase of a broader reform program. Additionally, ADB will provide a policy-based guarantee of up to $500 million for the first time, which is expected to unlock nearly $1 billion in commercial financing through private banks.
ADB’s Country Director for Pakistan, Emma Fan, acknowledged the country’s progress in stabilizing its economy. She said this initiative supports the government’s goals of reinforcing public finances and encouraging sustainable development through institutional and policy reforms.
The program focuses on improving tax policy and administration, enhancing government expenditure controls, and streamlining cash management. It also aims to reduce fiscal deficits and public debt while creating space for social and development spending.
Key components include support for digital transformation, investment facilitation, and private sector growth. These efforts are designed to create a more resilient and inclusive economic environment.
In addition to funding, a full support package—comprising technical assistance and coordination with development partners—will be provided to help Pakistan achieve long-term financial stability.
Adviser to the Finance Minister, Khurram Shehzad, confirmed the program’s approval on social media, stating that efforts by the Ministries of Finance and Economic Affairs secured strong support from ADB’s board.
Earlier, During the Asian Development Bank’s (ADB) annual meeting, Pakistan urged the international financial institution to enhance support for its economic recovery efforts, highlighting mounting debt, climate change impacts, and limited fiscal space as critical challenges. Representing Pakistan, Dr. Niaz stressed the need for effective and transparent disbursement of aid, underpinned by strong institutional integrity and governance.
Pakistan’s request for help arrives at a time of persistent economic strain, such as increased external debt service payments, climate shocks, and limited budgetary space to spend on social development or infrastructure. Dr. Niaz stressed that Pakistan is still on the path to reforms but needs continued international assistance to become stable and grow.
Reporter Waqas Azeem