ISLAMABAD: The Asian Development Bank (ADB) on Wednesday revised its forecast for Pakistan’s economic growth in the fiscal year 2025 (FY25) slightly upwards, projecting it at 3 per cent.
In an Asian Development Outlook (ADO) report issued by the Manila-based lending agency in September, Pakistan’s economic growth had been estimated to be struggling at 2.8pc in FY25, subject to domestic and external risks.
However, in a new ADO report issued today, the ADB said Pakistan’s growth in FY25 was projected at 3pc.
It noted that “greater macroeconomic stability following” the new International Monetary Fund (IMF) programme’s approval in September of a $7 billion Extended Fund Facility would “support recovery”.
It projected industrial output growth to speed up “with the suspension of import management measures, higher investor confidence, and easier access to foreign exchange”.
The report added that it expected a “more accommodative monetary policy” due to “faster-than-expected” ease in inflationary pressure, which should support economic activity.
“However, growth in agriculture is expected to weaken due to the heavy monsoon downpours during July–September 2024 and flood-like conditions in parts of the country,” it cautioned, adding that major crops such as wheat and cotton were projected to perform poorly in FY2025.
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, which reflected “high base effect and the impact of contained demand-side pressures”.
Additionally, it also showed “improved supplies of major food items, more favourable global commodity prices, and a delay in upward adjustments in administered energy prices”.
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 “have further weighed on the 2024 outlook”.
“The latter two economies’ 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,” it said.
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