The Asian Development Bank (ADB) has revised Pakistan’s GDP growth outlook for 2025, raising its forecast from 2.7% to 3%. The upgrade comes amid stronger-than-expected economic performance and a notable acceleration in industrial output, according to the bank’s latest economic report on Pakistan.
The report highlights that Pakistan recorded 5.7% growth in the final quarter of the previous fiscal year, signalling renewed economic momentum across major sectors. This surge, the ADB noted, reflects improved production levels, a more active private sector, and increasing market confidence.
Industrial Output and Investment Drive Momentum
The ADB underscored that Pakistan’s economic activity remained resilient even after the June 2025 floods, which initially raised fears of widespread disruptions. Despite these challenges, growth held steady due to strong private sector credit expansion, improved consumer spending, and revived investment flows.
The report adds that rising production in large-scale manufacturing industries has played a central role in driving the recovery, strengthening Pakistan’s economic base heading into 2025.
Stronger Outlook for FY 2025–26
Looking ahead, the ADB expects the current fiscal year to reflect further improvement, with the business climate becoming increasingly favourable. Growth projections for 2025–26 also show upward movement, supported by stabilizing macroeconomic conditions and a consistent rebound in key industries.
However, the ADB cautioned that global trade uncertainties and weak external demand could still weigh on Pakistan’s export sector. Despite these risks, domestic growth drivers—especially consumption, credit availability, and industrial activity—remain strong enough to sustain the positive trajectory.
The report concludes that Pakistan’s expanding investment activity and ongoing recovery in manufacturing are crucial elements behind the upgraded growth forecast for 2025.
