Pakistan’s economy is showing signs of recovery and stability, with the Asian Development Bank (ADB) expecting the country’s real GDP to grow by 2.5% in the fiscal year 2025, which ends in June 2026. This is the same growth rate recorded in the previous year (FY2024), and the ADB predicts a slight increase to 3.0% in FY2026.
This steady growth is mainly due to strict economic policies and ongoing reforms, especially in key areas like tax and the energy sector. The economic situation has also improved thanks to support from the International Monetary Fund’s (IMF) Extended Fund Facility program, which started in October 2024. This program has helped Pakistan stabilize its economy and strengthen the foundation for long-term, inclusive growth.
In the current fiscal year, private sector investment is expected to bounce back, supported by a stable currency and improving investor confidence. Both the industrial and service sectors are likely to benefit from lower interest rates and overall economic stability.
Inflation is also expected to ease. It is projected to drop to 6.0% in FY2025 and slightly lower to 5.8% in FY2026. This decline is mostly due to lower food prices, stable global oil and commodity prices, and reduced pressure from domestic demand.
However, a challenge that still remains is the low participation of women in the workforce. ADB believes that improving women’s access to education, job training, and safe transport can help boost economic growth and empower women at the same time.
