Key Takeaways:
i) Pakistan’s GDP is expected to grow by 2.5% in FY2025 and 3.0% in FY2026.
ii) Economic reforms, particularly in tax policy and the energy sector, are credited with improved macroeconomic stability.
iii) Inflation is projected to decline significantly, reaching 6.0% in FY2025 and 5.8% in FY2026.
Money Matters Monitoring Desk: Islamabad, Pakistan – April 10, 2025 – The Asian Development Bank (ADB) projects a 2.5% growth for Pakistan’s economy in fiscal year 2025, mirroring the rate of the previous year. This forecast, detailed in the ADB’s flagship “Asian Development Outlook (ADO) April 2025” publication, suggests that recent macroeconomic policies and ongoing economic reforms are beginning to stabilize the nation’s financial landscape. The ADB anticipates a slight increase to 3.0% growth in FY2026.
The forecast is based on the premise that Pakistan will continue to adhere to the IMF Extended Fund Facility (EFF) arrangement initiated in October 2024. The ADB highlights that consistent implementation of economic adjustments is crucial for building resilience and fostering sustainable, inclusive growth. The IMF approved a 37-month EFF for Pakistan, amounting to $7 billion, to support the country’s efforts in strengthening macroeconomic stability and addressing structural challenges.
ADB Country Director for Pakistan, Emma Fan, noted that the improved macroeconomic stability is a result of robust reform implementation. She stressed that sustained policy reforms are vital to maintain the growth trajectory and strengthen fiscal and external buffers. These reforms encompass various sectors, including tax policy, energy, and agriculture, aiming to broaden the tax base and enhance economic stability.
