Pakistan’s Economic Outlook Brightens: ADB Projects 2.5% Growth for FY2025

Pakistan’s economy is showing signs of recovery and stabilization, with the Asian Development Bank (ADB) projecting a 2.5% growth in GDP for the fiscal year 2025. This forecast, outlined in ADB’s Asian Development Outlook (ADO) April 2025, marks a continuation of the growth rate recorded in the previous fiscal year.

According to the report, the country’s economic momentum is being fueled by robust macroeconomic reforms, a more stable foreign exchange market, and support from the International Monetary Fund’s Extended Fund Facility (EFF), which commenced in October 2024.

“Pakistan is experiencing early signs of economic revival, thanks to consistent reform implementation in fiscal management and the energy sector,” said Emma Fan, ADB’s Country Director for Pakistan. “To sustain this growth, it’s essential that these reforms continue.”

Stabilization Measures Driving Confidence

The report credits Pakistan’s improved economic performance to targeted structural reforms, including better revenue collection strategies, improved energy sector governance, and a firm monetary policy stance. The resulting macroeconomic stability has contributed to growing investor confidence and increased private sector activity.

The ADB expects growth in FY2026 to rise modestly to 3.0%, driven by a favorable business climate, improved industrial output, and strengthened public-private sector collaboration.