ADB says Pakistan’s economy stabilising but warns of significant downside risks

The Asian Development Bank (ADB) said on Friday that Pakistan’s economy had stabilised and begun to show stronger momentum, but “downside risks were significant”. “Pakistan’s economy recovered as growth strengthened and inflation declined in fiscal year 2025 (FY2025, ended 30 June 2025), supported by tight macroeconomic policies and progress in economic reform,” the ADB said in a report today. According to the Asian Development Outlook (ADO) April 2026, ADB’s annual flagship economic publication, Pakistan was expected to sustain its economic performance in the medium term, with real gross domestic product (GDP) growth forecast at 3.5% in FY2026 and 4.5% in FY2027, from 3.1% in FY2025, as manufacturing recovers and investment increases.