ADB plans $10 billion financing for Pakistan under new five-year strategy

The Asian Development Bank plans to provide about $10 billion in financing to Pakistan over the next five years, under a new strategy aimed at supporting sustainable and inclusive economic growth, the lender said Wednesday.

The Manila-based institution launched its 2026-2030 Country Partnership Strategy, describing it as “a roadmap to support the country’s transition to sustainable and inclusive growth through private sector-led development”.

Economic recovery underpins strategy

The ADB said Pakistan’s economy has stabilized and returned to growth following a series of boom-and-bust cycles.

Gross domestic product expanded 3.1% in FY2025, recovering from a 0.2% contraction in FY2023. Average inflation fell sharply to 4.5% in FY2025 from 23.4% in FY2024, dropping below the State Bank of Pakistan’s target range of 5-7%.

The current account also improved, shifting from a 4.7% deficit of GDP in FY2022 to a 0.5% surplus in FY2025, the first surplus since FY2011.

The ADB said these gains were supported by International Monetary Fund programs, including a 37-month Extended Fund Facility launched in October 2024 aimed at addressing structural weaknesses and strengthening fiscal sustainability.

“Pakistan has made progress in stabilizing its macroeconomic conditions following a series of external shocks and has initiated important structural reforms,” said Emma Fan, the ADB’s country director for Pakistan.

She said the bank would support further reforms and investments to promote “robust and lasting growth” that benefits vulnerable populations.

Focus on private sector and investment

The strategy outlines three priorities: private sector development, inclusion and empowerment, and resilience and sustainability.

It emphasizes export- and investment-led growth, improved public financial management and a more business-friendly environment.

The ADB said it will support reforms to reduce regulatory burdens, improve infrastructure, expand access to finance and promote public-private partnerships.

Key sectors identified include energy, agriculture, water management and infrastructure, as well as opportunities in critical minerals, railways, multimodal transport, clean energy and workforce development.

Inclusion and climate resilience

The bank said it will also focus on reducing social disparities by investing in human capital, improving access to social services and increasing women’s participation in the economy.

Given Pakistan’s exposure to climate-related risks, resilience and sustainability will remain central to the strategy.

Planned initiatives include support for disaster risk management, climate adaptation and mitigation, water resource management, food security and air quality improvement.

The ADB said it will implement the strategy through a mix of policy reforms, financing tools, technical assistance and advisory support.