Overview
- The Asian Development Bank, which released its Asian Development Outlook on Friday, now projects Pakistan to grow 3.5% in FY2026 and 4.5% in FY2027, and India to expand 6.9% in FY2027 with 7.3% in FY2028.
- The bank warns a prolonged Middle East conflict could push up energy and fertiliser costs, disrupt oil and LNG flows near the Strait of Hormuz, cut remittances from Gulf countries, and widen current account deficits.
- Pakistan’s upgrade follows signs of stabilisation in FY2025 with 3.1% growth, inflation down to 4.5%, a current account surplus, and foreign reserves at a three‑year high of $14.5 billion, though inflation is now seen rising to 6.4% in FY2026 and 6.5% in FY2027.
- ADB says near‑term growth rests on a rebound in large‑scale manufacturing, stronger construction helped by budget incentives and post‑flood rebuilding, and rising private investment as business confidence improves.
- India’s forecast includes inflation at 4.5% this fiscal before easing to 4% next year, and the ADB urges prudent monetary easing and structural reforms in energy, taxation, trade, and state‑owned firms to preserve gains across the region.