The Asian Development Bank (ADB) has projected Pakistan’s economy to grow by 3.7% in the current fiscal year, below the federal government’s target of 4%, while warning that inflation is likely to accelerate amid rising global energy prices and tensions in the Middle East.
In its latest Asian Development Outlook, the ADB forecast Pakistan’s GDP growth at 3.7% for FY2026-27, matching the projected growth rate for neighbouring Bangladesh.
The lender also warned that Pakistan’s average inflation rate could rise from 7.2% to 8.3% during the fiscal year. It attributed the increase to higher global energy prices and continued geopolitical tensions in the Middle East, which are expected to push up the cost of fuel, electricity and other essential commodities.
The report suggests that while Pakistan’s economy is expected to maintain moderate growth, external risks and inflationary pressures remain key challenges for the year ahead.