ADB keeps Pakistan's GDP growth forecast at 3.7% — Dawn
The Asian Development Bank (ADB) has maintained its forecast for Pakistan's economic growth in fiscal year 2027 at 3.7%. This is below the government's budget target of 4%. At the same time, the bank expects average inflation to reach 8.3%, above the official forecast of 7%, Dawn reports.
Inflation forecast and risks
The ADB noted that its inflation forecast exceeds the State Bank of Pakistan's medium-term target range of 5–7%. According to the bank, high costs for energy, logistics and agricultural inputs will continue to affect domestic prices.
The bank warned of significant downside risks to the outlook. An escalation of the conflict in the Middle East could raise Pakistan's energy import costs, fuel inflation and disrupt labor markets in Gulf countries, affecting remittances from migrant workers.
Among other risks, the ADB cited the possible resumption of government austerity measures, tighter global financing conditions, tax revenue shortfalls, weather shocks to agriculture, as well as delays in reforms of the energy sector and state-owned enterprises.
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Indicators from the previous year
In fiscal year 2026, which ended on June 30, 2026, Pakistan's economic growth accelerated to 3.7% from 3.2% a year earlier. Expansion was supported by the services sector, a recovery in industrial production, agriculture and stronger private investment. At the same time, the conflict in the Middle East, according to the ADB, slowed economic activity in the final quarter of the year.
Agriculture grew by 2.9% despite losses of major crops caused by flooding, while private investment rose by 8.6% due to lower borrowing costs and improved business sentiment. Average inflation in fiscal year 2026 reached 7.1%, compared with 4.5% in the previous year, due to higher food prices and rising global oil prices.
ADB Pakistan Country Director Emma Fan said that maintaining the pace of reforms is important for attracting private investment, increasing resilience to external shocks and achieving more inclusive economic growth.
