The Asian Development Bank (ADB) said on Wednesday that Pakistan’s economic outlook depends largely on the success of ongoing reforms and projected its growth at three per cent in the fiscal year 2025-2026.

‘Asian Development Outlook’, the Manila-based lending agency’s annual flagship report, said provisional quarterly growth data for the first quarter of FY 2025 ending on June 30, suggested a sustained but slow recovery as performance in agriculture, industry and services remained lukewarm.

Noting that Pakistan still faces substantial vulnerabilities and structural changes, the ADB said that economic recovery was projected to continue in the medium term, with growth forecast at 2.5pc in FY 2024-25.

The growth forecasts were finalised before the April 2 announcement of new tariffs by the US administration, so the baseline projections only reflect tariffs that were in place previously. However, the report does feature an analysis of how higher tariffs may affect growth in Asia and the Pacific.

According to ADB, although ongoing fiscal consolidation and weaker farm income attributable to an anticipated decline in key crop production will constrain activity in FY2025, effective implementation of the reform programme should foster a more stable macroeconomic environment and gradually remove structural barriers to growth.

A rebound in electricity generation and gas and water supply also suggests potential revival in industry. Economic activity in both industry and services will benefit from further monetary easing and ongoing macroeconomic stability.

Economic activity will also benefit from a recovery in private investment, strengthened by perceptions of greater economic stability, along with recent and expected future monetary easing and a stable foreign exchange market. Strong remittance inflows, lower inflation, and monetary easing should support private consumption and growth, the report said.

It noted that........

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