Asian Development Bank revises Pakistan’s FY25 growth to 2.7pc

Islamabad: The Asian Development Bank (ADB) has revised Pakistan’s GDP growth estimate for FY25 slightly upward to 2.7%, citing stronger-than-expected performance in the industrial and services sectors.

“Pakistan provisionally grew 2.7% in FY2025 (ended 30 June 2025), resulting in the slight upward revision for FY2025, while the growth forecast for FY2026 is unchanged,” read the ADB’s Asian Development Outlook (ADO) July 2025, released on Wednesday.

“The revised growth forecast in Pakistan accounted for the higher-than-expected uptick in the industry and services sector, even as the expected declines in agricultural output come to pass,” it added.

Meanwhile, the report noted that easing price pressures have led to a downward revision in the country’s inflation forecast for FY2025.

“In Pakistan, the accelerated decline in food and nonfood prices for the first 11 months of FY2025 revised the inflation forecast for FY2025 downward, while the outlook for FY2026 remains unchanged,“it said.

Meanwhile, the ADB has lowered its growth forecasts for economies in developing Asia and the Pacific this year and next year, owing to expectations of reduced exports amid higher United States (U.S.) tariffs and global trade uncertainty, as well as weaker domestic demand.

ADB forecasts the region’s economies will grow by 4.7% this year, a 0.2 percentage point decline from the projection issued in April. The forecast for next year has been lowered to 4.6% from 4.7%.

The multinational lender warned that prospects for developing Asia and the Pacific could be dented further by an escalation of US tariffs and trade tensions. Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices, and a worse-than-expected deterioration in the property market of China.

“Asia and the Pacific have weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB Chief Economist Albert Park. “Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth.”

Meanwhile, ADB has revised the growth outlook for South Asia for 2025 to 5.9%, from 6.0% in the April 2025 ADO. The slight downward revisions for GDP growth in India and Sri Lanka in 2025 are primarily due to the effects of US tariff policies, it said.