ADB Sees Slow Growth in Pakistan Despite Rate Cut
ADB Flags Modest Growth for Pakistan Despite Interest Rate Cut
ISLAMABAD – The Asian Development Bank (ADB) has noted that Pakistan’s economy continues to face modest growth, even after the State Bank of Pakistan reduced the policy interest rate by 1.5% by the end of June 2025.
In its latest economic outlook, the ADB reported that a significant boost in Pakistan’s economic growth is unlikely in 2026, citing ongoing structural challenges and external risks. One major concern is the uncertainty surrounding U.S. tariffs on Pakistani exports, which could further impact trade and investor confidence.
Despite these hurdles, the report acknowledged some improvements in macroeconomic stability. Inflation in Pakistan has shown a steady decline, with both food and non-food inflation rates easing during the first eleven months of 2025.
The ADB described the economic environment as “cautiously optimistic,” recognizing Pakistan’s progress while emphasizing the need for sustained reforms to unlock stronger growth potential.
At the regional level, the ADB has also downgraded its growth forecasts for developing Asia and the Pacific. The revised outlook cites reduced exports due to increased U.S. tariffs, ongoing global trade tensions, and weaker domestic demand across several economies.
Earlier this month, Pakistan and the ADB signed an agreement to launch a women-inclusive finance programme aimed at promoting gender equity in economic participation.
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