Islamabad: The Asian Development Bank (ADB) has revised Pakistan’s gross domestic product (GDP) growth estimate for the fiscal year 2025 (ending June 30, 2025) slightly upward to 2.7%, attributing the improvement to better-than-expected performance in the industrial and services sectors.
The updated projection was shared in the ADB’s Asian Development Outlook (ADO) – July 2025 report released on Wednesday. It marks a modest increase from the bank’s earlier forecast, reflecting stronger domestic economic activity despite challenges in the agricultural sector.
“Pakistan provisionally grew 2.7% in FY2025, resulting in the slight upward revision for FY2025, while the growth forecast for FY2026 is unchanged,” the report stated. The bank noted that industrial and services sector expansion helped offset anticipated declines in agricultural output.
The ADB also revised Pakistan’s inflation forecast for FY2025 downward, citing easing price pressures. “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,” the report said.
On a broader scale, the ADB has lowered its overall economic growth forecasts for developing Asia and the Pacific amid global trade uncertainty, rising tariffs, and weaker domestic demand. The region is now expected to grow by 4.7% in 2025, down 0.2 percentage points from its April 2025 projection. The 2026 forecast has also been reduced to 4.6% from 4.7%.
The report warned that escalating United States (U.S.) tariffs, rising geopolitical tensions, disruptions to global supply chains, and energy price volatility could further dampen growth prospects in the region. It also highlighted concerns over China’s property market slowdown.
“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. He urged regional economies to focus on strengthening fundamentals, promoting open trade, and deepening regional integration to sustain investment, employment, and growth.
Within South Asia, the ADB revised its 2025 growth forecast slightly downward to 5.9%, from 6.0% projected earlier. This adjustment was attributed mainly to revised estimates for India and Sri Lanka, impacted by U.S. tariff policies and trade disruptions.
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