- FY26 growth forecast held steady at 3%.
- Regional GDP trimmed to 5.9% on trade risks.
- US tariffs, conflicts threaten regional supply chains.
KARACHI: The Asian Development Bank (ADB) has revised Pakistan’s economic growth forecast for the fiscal year 2025 slightly upward to 2.7%, up from its earlier projection of 2.5% made in April, citing stronger-than-expected performance in the industrial and services sectors, The News reported.
In its latest Asian Development Outlook released on Wednesday, the Manila-based lender said the revised forecast reflects “a higher-than-expected uptick in the industry and services sector, even as the expected declines in agricultural output come to pass.”
The ADB maintained its FY26 growth projection at 3%.
The report also noted a downward revision in the FY25 inflation estimate, attributing the improvement to a faster-than-expected decline in both food and non-food prices over the first 11 months of the fiscal year. The inflation outlook for FY26, however, remains unchanged.
Pakistan’s revised growth figures come amid a broader downgrade for South Asia, where regional GDP is now forecast to expand by 5.9% in 2025, slightly below earlier estimates of 6%. The revision reflects policy uncertainty and trade disruptions linked to heightened US tariff actions.
The ADB warned that risks to the region’s outlook remain tilted to the downside. Prospects for developing Asia and the Pacific could be dented further by an escalation of US tariffs and trade tensions.
Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices.
“Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB Chief Economist Albert Park.
“Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment and growth.”
