The Asian Development Bank has projected Pakistan’s economy to grow by 3.5 percent in 2026, with growth expected to improve further to 4.5 percent in 2027, according to its latest Asian Development Outlook April 2026 report.
The report said Pakistan’s economic recovery is likely to continue on the back of improving macroeconomic stability, easing inflation compared with previous highs, and a gradual strengthening in domestic demand.
The growth outlook places Pakistan above its estimated 3.1 percent expansion in 2025, indicating a steady, though moderate, recovery trajectory.
However, the ADB cautioned that inflationary pressures are expected to remain elevated. It forecast inflation at 6.4 percent in 2026 and 6.5 percent in 2027, reflecting the impact of higher global energy prices and regional geopolitical tensions, particularly the ongoing Middle East conflict.
The report noted that South Asia as a region is expected to grow by 6.3 percent this year, while Pakistan remains vulnerable to spillover risks from rising oil prices, higher fertilizer costs, and possible disruptions in remittance inflows from Gulf countries.
According to the ADB, the Middle East conflict has increased economic uncertainty across Asia, especially for energy-importing countries like Pakistan. Higher oil and commodity prices, along with tighter global financial conditions, could slow the pace of recovery if disruptions persist.
