ADB Pakistan growth forecast has been revised downward as the Asian Development Bank projected Pakistan’s economy to grow by 3.7% in FY2027, citing rising energy costs, pressure on workers’ remittances and persistent external risks. The updated outlook also includes higher inflation forecasts for the current and next fiscal years.
In its Asian Development Outlook (July 2026), the ADB said Pakistan’s economy expanded by an estimated 3.7% in FY2026. The growth was supported by improved performance in the industrial and services sectors, while agriculture recorded modest gains during the fiscal year.
Despite signs of recovery, the development bank warned that economic momentum is likely to remain moderate in FY2027. According to the report, higher energy prices and slower growth in workers’ remittances are expected to limit economic activity and weigh on overall growth prospects.
The ADB also raised its inflation forecast for FY2026 to 7.2%, pointing to increasing food and fuel prices. For FY2027, inflation is now projected at 8.3%, reflecting continued domestic price pressures and external uncertainties.
The report noted that ongoing tensions in the Middle East could create additional inflationary pressure through higher energy prices and supply chain disruptions. These geopolitical risks may continue to affect Pakistan’s economy if regional instability persists.
Economists believe the revised projections highlight the importance of maintaining fiscal discipline, encouraging investment and implementing structural reforms to strengthen economic resilience. Stable energy supplies and stronger export performance will also be critical to sustaining growth.
The latest ADB Pakistan growth forecast suggests that while Pakistan’s economy continues its gradual recovery, significant challenges remain. Policymakers are expected to focus on controlling inflation, supporting economic activity and reducing the impact of external shocks in the coming fiscal year.
