The Asian Development Bank (ADB) on Wednesday revised its forecast for Pakistan\u2019s economic growth in the fiscal year 2025 (FY25) slightly upwards, projecting it at 3 per cent.<\/p>\n\n\n\n
In an Asian Development Outlook (ADO) report issued by the Manila-based lending agency in September, Pakistan\u2019s economic growth had been estimated to be struggling at 2.8pc in FY25<\/a>, subject to domestic and external risks.<\/p>\n\n\n\n However, in a new ADO report<\/a> issued today, the ADB said Pakistan\u2019s growth in FY25 was projected at 3pc.<\/p>\n\n\n\n It noted that \u201cgreater macroeconomic stability following\u201d the new International Monetary Fund (IMF) programme\u2019s approval<\/a> in September of a $7 billion Extended Fund Facility would \u201csupport recovery\u201d.<\/p>\n\n\n\n It projected industrial output growth to speed up \u201cwith the suspension of import management measures, higher investor confidence, and easier access to foreign exchange\u201d.<\/p>\n\n\n\n The report added that it expected a \u201cmore accommodative monetary policy\u201d due to \u201cfaster-than-expected\u201d ease in inflationary pressure<\/a>, which should support economic activity.<\/p>\n\n\n\n \u201cHowever, growth in agriculture is expected to weaken due to the heavy monsoon downpours during July\u2013September 2024 and flood-like conditions in parts of the country,\u201d it cautioned, adding that major crops such as wheat and cotton were projected to perform poorly in FY2025.<\/p>\n\n\n\n When it came to inflationary pressure in the country, the ADB revised its inflation forecast downwards to 10pc from 15pc in September, noting that inflation numbers had declined to single digits in August<\/a>, which reflected \u201chigh base effect and the impact of contained demand-side pressures\u201d.<\/p>\n\n\n\n Additionally, it also showed \u201cimproved supplies of major food items, more favourable global commodity prices, and a delay in upward adjustments in administered energy prices\u201d.<\/p>\n\n\n\n For the South Asia region, the agency revised the outlook downwards, elaborating that while forecasts for Pakistan and Sri Lanka had been upgraded due to their economic recovery, countries such as Bangladesh and Maldives \u201chave further weighed on the 2024 outlook\u201d.<\/p>\n\n\n\n \u201cThe latter two economies\u2019 growth forecasts are also revised downward for 2025 due to the lingering effects of the political unrest of July-August 2024 in Bangladesh and fiscal consolidation measures in Maldives,\u201d it said.<\/p>\n\n\n\n In a seperate press release, the agency approved $330 million in additional financing to strengthen Pakistan\u2019s federally administered social protection programmes and services.<\/p>\n\n\n\n \u201cThe result-based loan for the ongoing Integrated Social Protection Development Program (ISPDP) will help expand the grassroots-level social protection to alleviate poverty among poor women and their families,\u201d it said.<\/p>\n\n\n\n The programme aims to improve the institutional capacity of the Benazir Income Support Programme (BISP) to \u201ctransition to adaptive and climate-resilient social protection\u201d.<\/p>\n\n\n\n \u201cThis will include enhancing access to education pathways for children and youth from poor families and increasing access to health services and nutrition supplies for beneficiaries who are in disaster-prone areas,\u201d the statement read.<\/p>\n\n\n\n ADB Director General for Central and West Asia Yevgeniy Zhukov said this would strenghten the country\u2019s \u201ceffort to improve human capital development and reduce intergenerational poverty, especially for women who are disproportionately affected during difficult economic situations\u201d.<\/p>\n\n\n\n \u201cADB\u2019s additional financing will help boost the government\u2019s ability to reach more of the poorest and most vulnerable in Pakistan.\u201d<\/p>\n\n\n\n The agency also expected US policy changes under President-elect Trump for Asia and the Pacific, which were likely to impact the region\u2019s outlook in the longer term.<\/p>\n\n\n\n \u201cChanges to US trade, fiscal, and immigration policies could dent growth and add to inflation in developing Asia and the Pacific,\u201d the report stated, adding that the impact of significant policy change would most likely materialise from 2026.<\/p>\n\n\n\n \u201cImpacts could be seen sooner if the policies are implemented earlier and more rapidly than expected, or if US-based companies front-load imports to avoid potential tariffs,\u201d according to the outlook.<\/p>\n\n\n\n In the report\u2019s supplement, ADB\u2019s Chief Economist Albert Park noted, \u201cStrong overall domestic demand and exports continue to drive economic expansion in our region.<\/p>\n\n\n\n \u201cHowever, the policies expected to be implemented by the new US administration could slow growth and boost inflation to some extent in China, most likely after next year, also impacting other economies in Asia and the Pacific,\u201d he added.<\/p>\n\n\n\n Despite assumed US policy changes, particularly on tariffs<\/a>, the impacts on developing Asia and the Pacific were limited under this high-risk scenario, according to the report.<\/p>\n\n\n\n<\/a>ADB approves $330m in additional financing to bolster Pakistan\u2019s social protection programmes<\/h2>\n\n\n\n
<\/a>US policy changes likely to impact Asia and Pacific\u2019s growth<\/h2>\n\n\n\n