Asian Development Bank keeps Pakistan's growth forecast at 3.7pc

Dawn reported that the Asian Development Bank has kept its growth forecast for Pakistan at 3.7 per cent for FY2027 in its September outlook. That figure is below the 4pc budget target, while the bank now expects average inflation of 8.3pc, above the official estimate of 7pc. The ADB left its July projection unchanged, after having earlier forecast 4.5pc growth in April 2026.

The bank linked the outlook to downside risks, including a possible Middle East escalation that could raise energy import costs and disrupt remittances from Gulf workers. Reinstated austerity measures by the government could also weigh on domestic demand, while tighter global financing, tax shortfalls, weather-related farm shocks and slow energy and state enterprise reforms were also flagged as risks. The ADB stressed that consistent reform implementation is essential for fiscal and external stability and investor confidence.

Growth picked up to 3.7pc in FY2026 from 3.2pc a year earlier, with agriculture up 2.9pc despite flood damage to major crops and private investment up 8.6pc. Inflation averaged 7.1pc during that year against 4.5pc in FY2025. S&P upgraded Pakistan's sovereign credit rating in July 2026, and Moody's did the same in August. Emma Fan, the ADB's Country Director for Pakistan, said that keeping up reform momentum is vital to attract higher private investment.