Asian Development Bank keeps Pakistan growth forecast at 3.7 percent for fiscal year 2027

Growth projection remains steady

Pakistan's gross domestic product is projected to stay at 3.7 percent in FY2027 according to the latest Asian Development Outlook report. This figure matches the bank's previous July forecast and differs from the government's budget target of 4 percent. The agency noted that growth accelerated from 3.2 percent in the prior fiscal year before stabilizing.

Inflation and external risks

Average inflation is expected to rise to 8.3 percent, which exceeds the central bank's medium-term target range of 5 percent to 7 percent. Elevated energy, logistics, and agricultural input costs continue to affect domestic prices while the Middle East conflict creates downside risks. An escalation in that region could increase energy import costs and disrupt labour markets in Gulf economies affecting workers remittances.

Supporting factors and challenges

Sustained economic reforms and improved external buffers are expected to support investor confidence and private investment despite lingering global issues. Recent sovereign credit rating upgrades have renewed access to international capital markets and reduced financing costs from their peak levels. However, household spending is likely to remain subdued because real incomes are compressed by high global energy prices.