The Asian Development Bank (ADB) on Wednesday revised its forecast for Pakistan’s economic growth in the fiscal year 2025, projecting it at 3%. Across the country, this report will evoke mixed reactions. On one hand, the upward revisions by not just the ADB but also other international monetary organisations signal growing confidence in Pakistan’s economic stability. This reflects the endorsement of the government’s efforts to arrest the economic freefall and initiate a tentative recovery. These international institutions, key players in Pakistan’s bailout efforts through substantial loans, appear to acknowledge that the administration has managed to halt the downward spiral.
On the other hand, a growth rate of 3% is underwhelming. It remains far below the achievements of other Asian countries, particularly neighbours like India and the rapidly rising economic powerhouse Vietnam. The modest upward revision—from a previously predicted 2.8% to 3%—underscores the sluggish pace of recovery and exposes a fundamental flaw in Pakistan’s economic revival strategy.
Austerity measures, as expected, do little to spur rapid growth. While the government has made some headway in addressing major challenges, such as dwindling foreign reserves, unsustainable agreements with independent power producers (IPPs), and soaring inflation, it has yet to unlock the critical driver of lasting economic health: robust, sustainable growth. True revival depends on strengthening key economic pillars—manufacturing, agricultural productivity, exports, and technological advancement. This is where the government must demonstrate creativity and foresight. For instance, Pakistan’s once-promising digital freelance economy has been severely hampered by ill-conceived restrictions on internet access and virtual private networks (VPN). Similarly, the agricultural sector, particularly cotton exports, continues to suffer from devastating floods and unpredictable weather, leading to declining yields.
While international endorsements of Pakistan’s economic efforts are encouraging, they are far from sufficient. The country needs to focus on policies that inject dynamism into the economy and create pathways for growth. Without bold and strategic interventions, a 3% growth rate will remain an uninspiring ceiling rather than the foundation for a more prosperous future.