ISLAMABAD: The Asian Development Bank (ADB) has said in its latest report, Asian Development Outlook, that Pakistan’s economy is on a medium-term recovery path and policy reforms are further strengthening this process.
According to the report, Pakistan’s GDP growth is expected to be 3 percent in fiscal year 2026. Although reforms and policy measures under the IMF program have supported the economy, factors such as natural disasters and recent floods pose a major threat to the growth momentum.
Increased investment and confidence
The ADB has said that the expected trade agreement between the United States and Pakistan in 2026 will improve business confidence, while an increase in foreign exchange reserves and inflow of foreign investment will also strengthen the economy. Similarly, the incentives given in the budget for the construction sector will help mitigate the losses to some extent.
Inflation and supply chain concerns
According to the report, average inflation is likely to remain at 6 percent in 2026. According to experts, the impact of the supply chain and the increase in food prices after the floods could increase inflationary pressures. Along with this, the expected increase in gas tariffs will also increase the expenses of ordinary consumers.
Policy challenges
The ADB stressed that in this situation, the State Bank will adopt a cautious monetary policy to keep inflation under control. Economists say that if the government maintains the continuity of reforms and focuses on policy implementation, Pakistan’s economy can gain confidence and momentum.
