DNA
ISLAMABAD: The Asian Development Bank (ADB) has forecast Pakistan’s economic growth to remain at 3.7% in ongoing fiscal year 2027, emphasising that continued reforms and stronger reserves were supporting the country’s economic outlook.
Pakistan’s economic performance improved during the previous financial year, with gross domestic product (GDP) rising from 3.2% in fiscal year 2025 to 3.7%, the ADB said in its report.
The increase in growth was broad-based, with recovery in services and manufacturing alongside improvement in agriculture, it added.
However, the ADB said that the Middle East conflict slowed economic activity during the final quarter of the previous financial year.
The Manila-based lender said that economic reforms, stronger reserves and renewed access to international capital markets were positive developments for Pakistan’s economic outlook.
An improvement in the sovereign credit rating was expected to support higher private investment, the ADB said, warning that expensive energy and external uncertainty could limit a faster pace of growth.
Overall, Pakistan’s economy made progress in strengthening economic stability over the past two years, the bank said, maintaining that reforms and promoting private investment would be important for inclusive growth.
According to the ADB, growth in fiscal year 2026 was supported by expansion in the manufacturing and services sectors.
Despite floods, agriculture grew by 2.9% while private investment increased by 8.6% amid lower interest rates and improved business confidence.
The report also said that overall international foreign exchange reserves increased, strengthening Pakistan’s resilience to external pressures.
Across developing Asia and the Pacific, economic growth will moderate from 5.5% in 2025 to 5% this year before edging up to 5.1% in 2027, according to the ADB.
“The region has remained resilient, but the risks are growing,” said ADB President Masato Kanda. “A strengthening El Nino with drier conditions means smaller harvests and reduced hydropower, pushing food and energy prices higher, and hitting the most vulnerable the hardest.”
The prolonged energy crisis and renewed risks in financial markets make it even more important for governments to prepare and protect the people most exposed, Kanda added.
