ADB Encourage Pakistan's Economic Growth, Deflation In Fiscal Year 2024-25

The Asian Development Bank has encouraged Pakistan's economic growth in fiscal year 2024-25, with food and non-food prices declining and inflation under control in the first eleven months of the last fiscal year

ISLAMABAD, (UrduPoint / Pakistan Point News - 23rd Jul, 2025) The Asian Development Bank has encouraged Pakistan's economic growth in fiscal year 2024-25, with food and non-food prices declining and inflation under control in the first eleven months of the last fiscal year.

In the midst of higher United States (U.S.) tariffs and global trade uncertainty, Pakistan provisionally grew 2.7 percent in FY2025 (ended 30 June 2025), resulting in the slight upward revision for FY2025, while the sustainable growth forecast for FY2026,according to Asian Development Outlook (ADO) July 2025 released Wednesday.

In Pakistan, the accelerated decline in food and nonfood prices for the first 11 months of FY2025 revised the inflation forecast for FY2025 downward, while the outlook for FY2026 remains unchanged.

The revised growth forecast in Pakistan accounted for the higher-than-expected uptick in the industry and services sector and also needed reform in the agricultural sector.

According to the report, developing Asia’s outlook has worsened since the April 2025 Asian Development Outlook (ADO), as trade and other risks loom large.

Gross domestic product (GDP) growth in the region accelerated in the first quarter (Q1) of 2025, underpinned by resilient consumption and front-loading of exports as firms anticipated tariff hikes in Q2 in the United States (US).

Disinflation continued, as food and oil prices declined. Despite these positive developments in Q1, developing Asia’s growth projections for both 2025 and 2026 have been downgraded compared with forecasts in the April 2025 ADO due to expectations of a more challenging external environment and weaker domestic demand.

Downside risks have also intensified.

Foremost among these is higher-than-expected US tariffs and trade uncertainty, which could worsen the region’s growth prospects.

A re-escalation of conflict in the Middle East could disrupt shipping and raise oil prices, curbing growth, and boosting inflation.

In addition, a protracted property downturn in the People’s Republic of China (PRC) could hamper the growth outlook in developing Asia’s largest economy, with adverse spillovers to the rest of the region.

The developing Asia refers to the following 46 members of the Asian Development Bank. The Caucasus and Central Asia comprises Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.

East Asia comprises People’s Republic of China; Hong Kong, China; Republic of Korea, Mongolia, and Taipei, China.

South Asia comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Southeast Asia comprises Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Viet Nam.

The Pacific comprises Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.