ISLAMABAD, Dec 10 (APP):Despite the disruption caused by mid-year floods, Pakistan’s growth outlook for both Fiscal Year 2025 and 2026 has been upgraded by the Asian Development Bank (ADB) as indicated in the latest report of the bank released on Wednesday.
The Asian Development Outlook (ADO) December 2025 notes that, despite challenges posed by the June floods, Pakistan’s economy grew by 5.7% in the fourth quarter of FY2025. The report also highlights strong performance in the country’s large-scale manufacturing sector in recent months of FY2026.
“Pakistan’s growth outlook for FY2025 has been revised upward following a stronger-than-expected performance in Q4,” the report states. It adds that the government of Pakistan has updated its GDP growth estimate for FY2025 to 3.0%, up from the previously projected 2.7%.
Additionally, inflation in the first four months of FY2026 stood at 4.7%, a notable improvement from 8.7% during the same period last year. Following a sharp spike after the floods, prices of key food items have begun to stabilize.
The upgrade in Pakistan’s growth forecasts reflects a less severe-than-anticipated impact from the floods, the report explains.
For the broader South Asia region, growth remains robust. ADB has revised the region’s 2025 growth forecast upward to 6.5%, from the previously projected 5.9%. The 2026 forecast remains unchanged at 6.0%.
Meanwhile, inflation in developing Asia is expected to ease further, with a revised 2025 forecast of 1.6%, down from 1.7% previously. The 2026 inflation forecast remains at 2.1%.
The ADB report also highlights that stronger-than-expected exports and the conclusion of key trade agreements, including with the United States, have bolstered the growth outlook for developing Asia and the Pacific.
Resilient exports, particularly in semiconductors and technology products, coupled with moderating inflation and stable financial conditions, have supported the region’s economic performance.
The overall economy of developing Asia is now projected to expand by 5.1% this year, up from the 4.8% forecast in September. The outlook for 2026 has also been revised upward, with growth now expected at 4.6%.