Pakistan’s Economic Outlook Shows Recovery, Growth, and Challenges in Female Labor Participation

The Asian Development Bank (ADB) has released its latest Economic Outlook Report for Pakistan, providing a positive outlook for the country’s economic future. The report highlights that Pakistan’s economy is expected to grow by 2.5% during the current fiscal year (2024-25) and is projected to reach 3% growth in the upcoming fiscal year (2025-26). This growth is attributed to the stabilizing effects of the International Monetary Fund (IMF) loan program, which has supported Pakistan through its recent economic challenges.

Inflation, which has been a significant concern for Pakistan, is showing signs of decline. According to the ADB, inflation has decreased steadily, supported by the global stability in oil and food prices. The inflation rate is expected to fall further to 6% by the end of the current fiscal year, and to 5.8% by FY 2025-26.

The report also points to an encouraging rise in remittances from overseas workers, which have played a crucial role in strengthening Pakistan’s external economic position. These remittances have bolstered the country’s foreign exchange reserves and provided much-needed liquidity in the economy. Pakistan has made notable strides in reforming its tax and energy sectors, which the ADB views as key to achieving long-term sustainable development. The ADB has praised these efforts, calling them a vital part of Pakistan’s ongoing recovery and growth trajectory.

However, the report also highlights a significant challenge: Pakistan continues to lag behind many of its regional neighbors in terms of female labor force participation. The ADB emphasizes that enhancing women’s participation in the workforce is essential to improving overall productivity and economic output. “Investing in women’s education and vocational training can align their skills with market needs, helping to unlock the full potential of the workforce,” the report states. As Pakistan works towards economic recovery, addressing gender disparities in the labor force will be crucial to achieving more inclusive growth.