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 expected to continue on the back of improving macroeconomic stability, easing inflation compared with previous highs, and gradual strengthening in domestic demand
The growth outlook places Pakistan above its 2025 estimated expansion of 3.1 percent.
At the same time, the ADB warned that inflationary pressures are likely 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 highlighted that South Asia as a whole is expected to grow by 6.3 percent this year, with Pakistan remaining vulnerable to spillover risks from rising oil prices, fertilizer costs, and possible disruptions in remittance flows from the Gulf region.
ADB said the conflict in the Middle East has increased economic uncertainty across Asia, especially for energy importing countries like Pakistan. Higher oil and commodity prices, along with tighter financial conditions, could weigh on the pace of recovery if disruptions persist.
