Asian Development Bank keeps Pakistan's growth forecast at 3.7pc
ISLAMABAD: The Asian Development Bank (ADB) on Wednesday forecast Pakistan’s economic growth rate at 3.7 per cent — lower than the 4pc budget target — and inflation at 8.3pc — higher than the official estimate of 7pc for the current fiscal year due to downside risks from the Middle East conflict. “Pakistan’s gross domestic product growth is projected to remain at 3.7pc in FY2027”, the…
The Asian Development Bank (ADB) has maintained Pakistan's economic growth forecast at 3.7 percent for fiscal year 2027, lower than the government's target of 4 percent, and projected inflation at 8.3 percent, higher than the official estimate of 7 percent. This forecast takes into account potential downsides from the conflict in the Middle East.
The ADB's latest outlook, released in September 2026, aligns with the previous July forecast of 3.7 percent growth. Inflation is expected to rise to 8.3 percent in fiscal year 2027, above the central bank's target range of 5 to 7 percent, due to increasing energy, logistics, and agricultural input costs. The bank cautioned that the economic outlook is subject to significant downside risks, such as an escalation of the Middle East conflict, which could increase energy import costs and intensify inflation.
Other risks include tighter global financing conditions, tax revenue shortfalls, weather-related agricultural shocks, and delays in energy-sector reforms. Despite these challenges, Pakistan's economy showed strong growth in fiscal year 2026, with growth accelerating to 3.7 percent from 3.2 percent in the previous year, driven by resilient services, rebounding manufacturing, recovery in agriculture, and stronger private investment.
The ADB emphasized that sustaining reforms and improving external buffers are crucial to supporting investor confidence and private investment.
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