Bank lowers FY 2027 growth forecast, raises inflation outlook for Pakistan
\n ISLAMABAD
\nThe Asian Development Bank (ADB) said Thursday that Pakistan\u2019s economy grew at 3.7% in fiscal year 2025-26, supported by strong performance in the industrial and services sectors along with modest gains in agriculture.
\nAccording to the Asian Development Outlook (ADO) July 2026, the economic growth during FY26, which ended on June 30, 2026, was driven by broad-based expansion across key sectors of the economy.
\nThe ADB, however, revised down its GDP growth forecast for FY2027 to 3.7%, citing higher energy costs and mounting pressure on workers\u2019 remittances that are expected to weigh on economic activity.
\nThe bank also revised Pakistan\u2019s inflation forecast upward to 7.2% for FY26, attributing the increase to rising food and fuel prices.
\nFor FY27, the inflation forecast has been raised further to 8.3%, reflecting the persistent adverse spillover effects of the ongoing Middle East conflict.
\nAccording to the ADB, elevated energy prices and continued external uncertainties are expected to keep inflationary pressures high, posing challenges to Pakistan\u2019s economic outlook in the coming fiscal year.
\nIt is pertinent to note that the bank has lowered its growth forecast for developing Asia and the Pacific economies to 4.9% in 2026, down from 5.5% in 2025. This is a reduction of 0.2 percentage points from April projections, according to ADB\u2019s latest economic outlook released by the bank on Thursday.
\nProlonged disruptions to energy markets caused by the Middle East conflict have weighed more heavily on the region\u2019s prospects than anticipated, says the ADO report, adding the 2027 growth forecast is maintained at 5.1%, reflecting recovering activity as these pressures ease.
\nThe outlook expects disruptions to global energy markets to unwind only gradually, despite a framework agreement signed in June.
\nWith impacts extending beyond energy to fertilisers, other commodity prices, and supply chains, inflationary pressures are likely to persist.
\nRegional inflation is now forecast at 4.3% this year compared to 3% in 2025\u2014an upward revision of 0.7 percentage points from April. The inflation forecast for 2027 remains at 3.4%.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bank lowers FY 2027 growth forecast, raises inflation outlook for Pakistan ISLAMABAD The Asian Development Bank (ADB) said Thursday that Pakistan\u2019s economy grew at 3.7% in fiscal year 2025-26, supported by strong performance in the industrial and services sectors along with modest gains in agriculture. According to the Asian Development Outlook (ADO) July 2026, the […]<\/p>\n","protected":false},"author":2,"featured_media":534934,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-555484","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n