The Asian Development Bank (ADB) has released its latest Economic Outlook Report on Pakistan, highlighting signs of macroeconomic stability, improved inflation management, and growth prospects for the upcoming fiscal year.

According to the report, Pakistan's economy is expected to grow by 2.5% during the current fiscal year, while growth is projected to reach 3% in the next fiscal year (2025-26). The ADB attributes this gradual recovery this financial year to the stabilizing effects of the International Monetary Fund (IMF) loan program, which has helped Pakistan navigate economic challenges.

Inflation continues to decline

The report also brings positive news on the inflation front. The inflation rate in Pakistan has steadily declined, supported by global stability in oil and food prices. The ADB expects inflation to drop to 6% by the end of the current fiscal year, and further down to 5.8% in FY 2025-26.

Boost in remittances

Pakistan has witnessed an increase in remittances from overseas workers during the current fiscal year, which has further strengthened its external position. The country has also made notable progress in tax and energy sector reforms, which the ADB praises as a crucial step toward sustainable development.

Challenges in female labour

Despite the economic improvements, the report notes a significant challenge: Pakistan lags behind other regional countries in female labour force participation. The ADB stresses that education and vocational training for women can play a vital role in improving skills and aligning them with market needs.

"Enhancing women’s participation in the workforce can significantly increase productivity and economic output," the report says.