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ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold

ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold
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A picture shows the logo of the Asian Development Bank (ADB) displayed outside its headquarters in Manila on September 2, 2010. (AFP/File)
ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold
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In this file photo, taken and released by the Press Information Department on March 5, 2025, Pakistan Prime Minister Shehbaz Sharif holds a special cabinet meeting at the Jinnah Convention Center in Islamabad, celebrating “economic achievements” during the first year of his government. (PID/File)
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Updated 09 April 2025
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ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold

ADB forecasts 2.5% growth for Pakistan this fiscal year as economic reforms take hold
  • The Manila-based lender says the country’s projected growth is likely to rise to 3% in the next fiscal year
  • ADB maintains female labor force participation remains low in Pakistan compared to regional countries
Updated 09 April 2025
Ismail Dilawar
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KARACHI: Pakistan’s economy is expected to grow by 2.5% in the current fiscal year, supported by ongoing reforms and improved macroeconomic stability, the Asian Development Bank (ADB) said on Wednesday.
Pakistan has undertaken stringent economic reforms following a prolonged financial crisis that forced it to seek loans from the International Monetary Fund (IMF) over the past two years.
Since then, macroeconomic indicators have improved significantly, though the government acknowledges the need for further consolidation through policies aimed at boosting exports and attracting investment.
ADB’s flagship economic publication, the Asian Development Outlook, also maintained in its April edition the country’s economic position has strengthened under the IMF program.
“Pakistan’s economy has benefitted from improved macroeconomic stability through robust reform implementation in areas such as tax policy and energy sector viability,” said ADB Country Director for Pakistan Emma Fan. “Sustained implementation of policy reforms is vital to buttress this growth trajectory and fortify fiscal and external buffers.”
The Manila-based lender said, “Pakistan’s real gross domestic product (GDP) is expected to grow by 2.5% in FY2025, the same growth rate from FY2024.”
It also projected growth to rise to 3% in FY2026.
The report noted average inflation was expected to decline significantly to 6% in FY2025 and further to 5.8% in FY2026.
However, it warned that female labor force participation remained low in Pakistan compared to regional and peer countries, adding that enabling more women to work outside the home could boost productivity and output while advancing female empowerment.

Topics: Asian Development Bank (ADB) Pakistan's economy GDP forecast

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Pakistan dispatches another shipment carrying 97 tons of relief goods for Gaza

Pakistan dispatches another shipment carrying 97 tons of relief goods for Gaza
Updated 05 May 2025
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Pakistan dispatches another shipment carrying 97 tons of relief goods for Gaza

Pakistan dispatches another shipment carrying 97 tons of relief goods for Gaza
  • The development comes as death toll from Israel’s war on Gaza rises to 52,567 
  • Pakistan has sent a total of 1,615 tons of relief aid for the war-torn Palestinians
Updated 05 May 2025
Hasaan Ali Khan

ISLAMABAD: Pakistan has dispatched 97 tons of humanitarian aid for the war-affected people of Gaza, its National Disaster Management Authority (NDMA) said on Monday, as Israel voted to scale up the offensive against Hamas in Gaza to the point of seizing the entire enclave.
The death toll in the Gaza Strip due to the ongoing Israel-Hamas war has reached 52,567, according to Palestinian authorities. In the past 24 hours alone, 32 people were reportedly killed and 119 others injured, bringing the total number of injuries to over 118,600.
Pakistan’s NDMA said the latest shipment, which is the 16th aid consignment for Gaza and the overall 27th sent to the Middle East, was dispatched as part of Pakistan’s ongoing humanitarian efforts.
“The latest consignment, sent in collaboration with Al-Khidmat Foundation, comprises approximately 85 tons of canned food, 10 tons of rice and two tons of powdered milk,” the NDMA said.
“The aid was transported via a chartered flight from Jinnah International Airport, Karachi, to Amman (Jordon) for onward distribution to the people of Palestine.”
Israel ended its months-long ceasefire with Hamas by launching a surprise bombardment on Mar. 18 and has been carrying out daily waves of strikes since then. Israeli forces have expanded a buffer zone, encircled the southern city of Rafah, and now control around 50 percent of the territory.
Israel has also sealed off the territory’s two million Palestinians from all imports, including food and medicine, for nearly 60 days. Aid groups say supplies will soon run out and that thousands of children are malnourished.
Pakistan, which does not have diplomatic ties with Israel, has consistently condemned Israeli military actions and called for the uninterrupted flow of humanitarian aid into Palestinian territory.
The South Asian country has dispatched a total of 1,615 tons of relief aid exclusively for Palestine, according to the NDMA. Overall, Pakistan has sent 2,142 tons of humanitarian aid, including 416 tons for Lebanon and 111 tons for Syria.
“The Government of Pakistan remains steadfast in its commitment to standing with the people of Palestine and will continue to provide humanitarian assistance based on the evolving needs of those affected by the ongoing crisis,” the authority said.

Topics: pakistan palestine ties National Disaster Management Authority of Pakistan (NDMA) Al-Khidmat Foundation

Pakistan takes journalists to Azad Kashmir to rebuff Indian allegations of militant training camps

Pakistan takes journalists to Azad Kashmir to rebuff Indian allegations of militant training camps
Updated 05 May 2025
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Pakistan takes journalists to Azad Kashmir to rebuff Indian allegations of militant training camps

Pakistan takes journalists to Azad Kashmir to rebuff Indian allegations of militant training camps
  • Indian media reports alleged presence of militant training camps in Bela Noor Shah and Pir Chinasi that New Delhi planned to target over Pahalgam attack
  • New Delhi blamed the attack on Pakistan, Islamabad has denied the charge and called for a credible, international probe to reveal facts about the attack
Updated 05 May 2025
SAIMA SHABBIR

Bela Noor Shah, Azad Kashmir: Pakistan’s Information Minister Attaullah Tarar on Monday led local and foreign journalist to various sites in Azad Kashmir, where India alleges Pakistan has established militant training camps, describing the allegations as a “desperate attempt” by New Delhi to divert attention from its “internal failure” in an attack in Pahalgam.
Tensions between India and Pakistan have surged to alarming levels over the attack in Indian-administered Kashmir’s Pahalgam town that killed 26 tourists on Apr. 22. New Delhi has accused Islamabad of backing the perpetrators, an allegation Pakistan has vehemently denied and called for a credible, international probe to ascertain facts about the assault.
Subsequent Indian media reports alleged the presence of militant training camps in Azad Jammu and said India intended to target them in response to the Pahalgam attack. Tarar attempted to dismiss the Indian claims by taking a delegation of journalists to de facto border dividing the disputed Himalayan region to witness on-ground realities for themselves.
“There were numerous contradictions and inconsistencies in their [Indian] claims and they failed to substantiate them and we are proactively present at one of the locations India has alleged to be a terrorist camp,” Tarar told journalists at Bela Noor Shah, some 26 kilometers from Azad Kashmir’s capital of Muzaffarabad.
“The Indian allegations regarding the areas of Bela Noor Shah and Pir Chinasi in Azad Kashmir are fabricated and baseless as not only is the local population living a normal life [here], but educational institutions are [also] functioning and tourism is continuing as usual.”
Kashmir has been a flashpoint between India and Pakistan since their independence from Britain in 1947. The region is divided between the two countries, though both claim it in full and have fought two of their three wars over the disputed territory.
Since 1989, several Kashmiri groups have carried out attacks in Indian-administered Kashmir, seeking independence or a merger with Pakistan. India accuses Pakistan of supporting these groups, a charge Islamabad denies, insisting it offers only diplomatic and political support to Kashmiris.
Following the April 22 attack, public anger has swelled India and Prime Minister Narendra Modi has given his military “full operational freedom” to respond to the assault. There have been fears that India may conduct limited strikes close to its border with Pakistan.
Denying Pakistan’s involvement in the attack, Tarar criticized India for not providing any evidence to back up its claims and reiterated that India’s possible strikes against Pakistan will have a “forceful response.”
“Our desire for peace should not be mistaken for weakness as any Indian aggression will be met with a strong and forceful response — one they will remember for ages,” he said.
India has consistently attempted to defame Pakistan through “false propaganda” but all such efforts have failed to yield results, according to the Pakistani information minister.
It was evident from the visit of the media delegation, which was flown to Muzaffarabad from Islamabad and was later taken to the scenic town of Bela Noor Shah via jeeps.
Arab News team observed lush, serene hills of Azad Kashmir and business going on as usual in the town.
“This is a tourist spot and very peaceful area where people from all over Kashmir and Pakistan come for recreation,” Muzaffarabad Commissioner Ghuftar Hussain told Arab News at Bela Noor Shah.
Ameer Ali, a 23-year-old resident of the nearby Sawan Pani village who had come for recreation at the top of the hill, said he had never seen any militant camp in the area during his lifetime.
“I am a university student in Muzaffarabad and have frequently visited various places in the area with friends, but I have never seen any camps anywhere in these regions,” he told Arab News, adding that Kashmiris want peace, but they would fight alongside Pakistan Army if they were attacked by India.
“If India attacks us, Kashmiris will stand shoulder to shoulder with Pakistan Army and firmly resist any Indian aggression.”
Shafaat Qadri, a 45-year-old madressah teacher, said Bela Noor Shah had been nothing but a peaceful tourist spot.
“Today, I brought a visiting friend to this picnic spot who is here from Rawalakot University,” he said. “Visiting this place has been part of our routine, and if there were any suspicious activities here, they could not go unnoticed by the locals.”
Kashmiris have grown accustomed to such Indian allegations and they no longer “take them seriously,” Qadri added.

Topics: Pakistani information minister atta tarar azad kashmir Pakistan India Ties Pahalgam attack

Pakistan cuts interest rate to spur growth as ‘geopolitical’ tensions pose economic challenges

Pakistan cuts interest rate to spur growth as ‘geopolitical’ tensions pose economic challenges
Updated 40 min 41 sec ago
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Pakistan cuts interest rate to spur growth as ‘geopolitical’ tensions pose economic challenges

Pakistan cuts interest rate to spur growth as ‘geopolitical’ tensions pose economic challenges
  • Monday’s decision came against the backdrop of soaring tensions with neighboring India following a deadly attack on tourists in Indian Kashmir
  • The central bank expects the economy to settling between 2.5 and 3.5%, mainly because of low agricultural output and industrial outturns
Updated 40 min 41 sec ago
Ismail Dilawar

KARACHI: Pakistan’s central bank on Monday slashed the key policy rate by 100 basis points 11% to spur growth, amid challenges posed by trade tariffs and geopolitical tensions with archrival India.
The State Bank of Pakistan (SBP) said global uncertainty surrounding trade tariffs and geopolitical developments warranted a “measured monetary policy stance,” espite the favorable inflation outlook. This is the lowest rate since December 2021.
Monday’s decision came against the backdrop of soaring tensions with neighboring India following a deadly attack on tourists in Indian Kashmir. The nuclear-armed neighbors have announced measures meant to harm each other’s economy.
It also came ahead of an imminent decision by the International Monetary Fund to release the next tranche of $1 billion to Islamabad from its $7 billion bailout program, with the previously “sticky” core inflation easing to 8% in April.
“The committee noted that inflation declined sharply during March and April, mainly due to a reduction in administered electricity prices and continued downtrend in food inflation,” the central bank said in a statement after a meeting of its monetary policy committee (MPC).
Prime Minister Shehbaz Sharif government’s efforts to revive Pakistan’s debt-ridden economy with the help of International Monetary Fund (IMF) received repeated setbacks after the US imposed 29% tariffs on its imports, followed by a military standoff with neighboring India that holds Islamabad responsible for the recent Kashmir attack. Given this the central bank decided to maintain a measured monetary policy stance.
The IMF has sharply downgraded its 2025 and 2026 growth projections for advanced and emerging economies because of the prevailing global uncertainty around tariffs that has triggered heightened financial market volatility and a sharp decline in global oil prices.
“Considering the evolving developments and risks, the MPC viewed that the real policy rate remains adequately positive to stabilize inflation in the target range of 5 – 7%, while ensuring that the economy grows on a sustainable basis,” the SBP said.
The government expects the economy to expand 3.6% this fiscal year ending in June, while the central bank sees it settling between 2.5% to 3.5%, mainly because of low agricultural output and “below expectation” outturns in industrial production.
The central bank expects the economy to expand next fiscal year but warned of risks emanating from global uncertainty.
Shahid Ali Habib, chief executive officer at Arif Habib Corporation Ltd., termed the central bank decision “very good” and said lower borrowing costs will create economic activity in the South Asian nation where the full-year inflation is expected to remain at 5%, the current account to post nearly $1.3 billion surplus and international oil prices to range between $60 and $62 a barrel.
“The State Bank wants to spur some growth as our large-scale manufacturing growth remains very low at around 1.9%,” Habib told Arab News. “This is a very good decision to kick off economic growth in the country.”
Debt-ridden Pakistan, which had repaid or rolled over most of the $26 billion foreign loans it had to repay this year, expects its foreign exchange reserves to increase to $14 billion by the end of next month on the back of expected realization of planned official inflows.
The IMF’s executive board is scheduled to meet later this week to approve the release of about $1 billion tranche to Pakistan. The board’s approval has most of the time been a formality after the signing of a staff-level agreement between the Washington-based lender and the authorities in Islamabad.
The country’s trade deficit though sharply rose to $3.4 billion in April, but the central bank said easing global oil prices were moderating Pakistan’s overall import bill.
Last month, Pakistan’s trade deficit widened by 55% to $3.39 billion, marking the highest monthly trade gap in three years, according to Topline Securities Ltd.
“Going forward, the MPC expects this build-up in FX reserves to continue in FY26, based on a moderate current account deficit and improved financial inflows,” the SBP said.
The record inflow of worker remittances and the SBP’s purchases of dollars partially cushioned the impact of large ongoing debt repayments on the central bank’s forex reserves that have declined to $10.2 billion.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the country’s top representative body of trade and industries, expressed disappointment over the SBP’s decision.
“The policy rate continues to be 11.0% as of today – which reflects a premium of 1,070 basis points (bps) as compared to inflation and it makes no economic sense,” FPCCI President Atif Ikram Sheikh said in a statement, demanding a cut of 500 basis points.
Monday’s cut was higher than market expectations as majority of the economists were expecting a 50 basis points cut, according to Mohmmed Sohail, chief executive officer at Topline Securities Ltd., which last month conducted a poll on rate cut expectations.
“We will see gradual economic growth led by lower rates,” said Sohail, who expected another 100 basis points reduction in the interest rate by December.

Topics: Policy Rate State Bank of Pakistan Pakistan economy

‘We are not afraid’: Pakistanis at India-Pakistan border ceremony amid Kashmir tensions

‘We are not afraid’: Pakistanis at India-Pakistan border ceremony amid Kashmir tensions
Updated 05 May 2025
AFP
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‘We are not afraid’: Pakistanis at India-Pakistan border ceremony amid Kashmir tensions

‘We are not afraid’: Pakistanis at India-Pakistan border ceremony amid Kashmir tensions
  • Soldiers from both nations perform aggressive marches, avoid traditional handshake as emotions run high over standoff
  • Border crossing closed after attack in Indian-administered Kashmir that New Delhi blames on Pakistan, which denies charge
Updated 05 May 2025
AFP

At the Wagah-Attari border, which marks the final boundary between the nuclear-armed nations of India and Pakistan, the atmosphere is charged with patriotism. The sound of drums can be heard as soldiers perform a choreographed, ceremonial march, showcasing both countries’ pride.
However, the usual symbol of cooperation — a handshake between the two countries’ soldiers — is missing, and the iron gates that separate the two sides remain locked. This is in the context of tense relations between India and Pakistan, heightened by a deadly attack in Kashmir.
Despite the tension, people gather to express their feelings, celebrate their national identities, and watch the dramatic flag-lowering ceremony that has become a symbolic ritual at the border. Visitors on the Pakistani side say they are not afraid of the soaring tensions and for them, it is business as usual.
“We don’t feel any such tension. We feel that we are as safe as we used to be before,” Muhammad Luqman, a Pakistani teacher who was visiting the Wagah border, told AFP.
“The reason for this is that we feel our country’s defense is in strong hands. We don’t have any sort of doubt or fear.”
Indian Prime Minister Narendra Modi has given his military “full operational freedom” to respond to the attack as public anger swelled in his country after New Delhi accused Pakistan of involvement in the April 22 attack that killed 26 tourists. Islamabad has denied the allegations and called for a credible international probe into it.
On Monday, Pakistan carried out a second missile test in three days after saying it was preparing for an incursion by India.
The two nuclear-armed countries have exchanged gunfire along their de facto border in Kashmir, and there have been fears that the latest crisis between the nuclear-armed rivals, who have fought three wars, including two over the disputed region of Kashmir, could spiral into a military conflict.
“Pakistan is a brave nation. We live near the Wagah border. If there is any danger, we will be first picked up from the village, then it will be the turn of the people of the city, because we live in the [border] village,” said Muhammad Abu Bakar, a student.
“The villagers should be afraid, but the villagers are not afraid.”
The flare-up between India and Pakistan has once again alarmed world and regional powers, who have called for restraint and urged the two neighbors to resolve the crisis through dialogue.

Topics: Wagah Border Pakistan India Ties

Pakistan continues to engage foreign capitals, friendly states as tensions with India simmer over Kashmir

Pakistan continues to engage foreign capitals, friendly states as tensions with India simmer over Kashmir
Updated 05 May 2025
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Pakistan continues to engage foreign capitals, friendly states as tensions with India simmer over Kashmir

Pakistan continues to engage foreign capitals, friendly states as tensions with India simmer over Kashmir
  • Pakistan-India relations have plummeted since India accused Islamabad of an attack in the disputed Kashmir region that killed 26 tourists on April 22
  • The subsequent diplomatic flare-up, exchanges of gunfire between the two neighbors has alarmed world and regional powers, who have called for restraint
Updated 05 May 2025
KASHIF IMRAN

ISLAMABAD: Pakistan continues to engage foreign capitals and friendly nations as tensions simmer with India over an attack in Indian-administered Kashmir that killed 26 tourists on April 22, with the two nuclear-armed neighbors taking a raft of punitive measures against each other.

India has blamed Pakistan for the attack in Pahalgam resort town. Islamabad has denied involvement and asked for evidence which New Delhi has so far not publicly shared.  Both countries have since exchanged gunfire in Kashmir, taken diplomatic measures against each other, expelled citizens and ordered the border shut.

Amid soaring tensions, Iranian Foreign Minister Seyyed Abbas Araghchi arrived in Pakistan on Monday for discussions on bilateral ties and regional developments, days after Pakistani Prime Minister Shehbaz Sharif postponed his scheduled visit to Malaysia.

Separately, British High Commissioner Jane Marriott met Sharif at his office, where the prime minister shared Pakistan’s perspective on the prevailing situation in South Asia. Pakistan's Interior Minister Mohsin Naqvi is also on a visit to Gulf countries, including Oman and Qatar, where he is expected to brief the Gulf leaders on Pakistan's stance.

"We will demonstrate patience, we will exercise full restraint and we will not be the first one to take any escalatory move," Pakistan's Deputy Prime Minister Ishaq Dar told reporters in Islamabad, following his meeting with the Iranian FM Araghchi.

"However, if India takes any adventure, any escalatory move, then we will give a befitting reply. So, that's where we stand."

Dar said Pakistan had nothing to do with the Pahalgam incident, reiterating PM Shehbaz Sharif's offer for a credible international probe into the April 22 attack.

"Our offer is very much there," he added.

In his meeting with FM Araghchi, PM Sharif shared Pakistan’s concerns over the prevailing tensions in South Asia as a result of India’s "provocative behavior" since the Pahalgam attack, according to Sharif's office.

"He categorically rejected any attempts to link Pakistan to the incident, without sharing any evidence," Sharif's office said. "He also stressed that India’s weaponization of the Indus Waters Treaty was unacceptable and a redline for the people of Pakistan."

India suspended the 1960 World Bank-mediated treaty a day after the Pahalgam attack, saying the suspension would last until "Pakistan credibly and irrevocably abjures its support for cross-border terrorism." Pakistan has described the suspension of treat as an "act of war."

The flare-up and exchanges of small arms fire between India and Pakistan across their de facto border in Kashmir has alarmed world and regional powers, who have called for restraint and urged the two neighbors to resolve the crisis through dialogue. Pakistan has assured foreign capitals and friendly nations that it would not be the first one to strike, according to officials.

In his meeting with British High Commissioner Marriott, Sharif urged the United Kingdom, which enjoys good relations with both Pakistan and India, to play its part in de-escalating the situation.

"The British high commissioner thanked the prime minister for sharing Pakistan’s position and said that the UK would work closely with Pakistan and India for maintaining regional peace and security," Sharif's office said.

Also on Monday, Interior Minister Naqvi met his Qatari counterpart Sheikh Khalifa bin Hamad bin Khalifa Al-Thani and briefed him on the prevailing regional situation.

"Pakistan has always rejected the policy of aggression. India has been offered an independent and impartial investigation into the Pahalgam incident, the truth about the incident should come before the world as to who is really responsible for it," Naqvi was quoted as saying by his ministry.

"Making baseless and illogical accusations against Pakistan is tantamount to ignoring our great sacrifices in the war against terrorism."

Pakistan and India have a history of bitter relations. They have fought two of their three wars over Kashmir, a region split between them, since gaining independence from the former British colonial rule in 1947.

Topics: Pakistan Iran Ties Deputy Prime Minister Ishaq Dar Pakistan India Ties

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