ADB warns of rising risks to economy

The Asian Development Bank (ADB) has sounded the alarm over Pakistan’s economy, warning of mounting downside risks to growth and stability, with inflation projected to climb to 6 percent in fiscal year 2026 on the back of flood-hit food supplies and higher gas tariffs. The Bank in its latest “Asian Development Outlook (ADO) September 2025,” stated that the fiscal year 2026 growth forecast unchanged at 3 percent, reflecting the expectation that economic performance will be buoyed by continued reform to address structural weaknesses. The report noted that Pakistan’s economic outlook faces several downside risks that could adversely affect growth and macroeconomic stability. Key domestic risks stem from policy slippage and climate change. Failure to meet revenue and fiscal consolidation targets, or delays in implementing critical reforms, remain top concerns.