ADB projects Pakistan's FY2027 growth at 3.7%, inflation at 8.3%

The Asian Development Bank has kept its growth forecast for Pakistan at 3.7 per cent for FY2027, while now expecting inflation to climb to 8.3 per cent. According to The Express Tribune, the projections appear in the bank's September 2026 Asian Development Outlook, released on Wednesday.

Growth reached 3.7 per cent in FY2026, up from 3.2 per cent a year earlier, helped by easier credit conditions and private investment that expanded 8.6 per cent in real terms. Household spending, however, rose only 0.8 per cent as costlier energy eroded real incomes. Average inflation ran at 7.1 per cent over the year, peaking at 11.7 per cent in May, a month after April's record fuel hike.

The bank expects fuel, logistics and farm input costs to keep inflation above the central bank's target range in FY2027, and it cautioned that an escalation in the Gulf could reduce remittances from Gulf economies. On the fiscal side, the deficit narrowed to 2.6 per cent of GDP, but the bank attributed much of that to lower interest payments rather than a wider tax base.