ADB to Invest $10 Billion in Pakistan Over Next 5 Years

ADB to Provide $10 Billion Financing to Pakistan Under 2026-30 Strategy​

New Country Partnership Strategy Targets Sustainable and Inclusive Growth​

Islamabad, March 19: The Asian Development Bank is expected to extend approximately $10 billion in financing to Pakistan over the next five years as part of its Country Partnership Strategy for 2026-30, according to a media report released on Thursday.

The Manila-based multilateral lender unveiled the strategy on Wednesday, outlining a comprehensive roadmap aimed at supporting Pakistan’s transition toward sustainable and inclusive economic growth through private sector-led development.

Focus Areas: Private Sector Growth, Inclusion, and Sustainability​

The five-year strategy is structured around three key pathways. These include enabling private sector development, advancing inclusion and empowerment, and enhancing resilience and sustainability.

These priorities will be supported by crosscutting themes such as good governance, institutional strengthening, gender equality, social inclusion, digital transformation, and regional cooperation.

ADB Country Director for Pakistan Emma Fan stated that the strategy is designed to address structural challenges while promoting long-term economic stability.

She said the plan encourages strategic investments and reforms across critical sectors to stimulate growth and generate employment, while supporting both public and private sector initiatives.

Structural Reforms and Investment-Led Growth at the Core​

The strategy highlights that Pakistan has stabilized its macroeconomic conditions following external shocks and has initiated key structural reforms.

It emphasizes a shift toward export- and investment-led growth, supported by improved public financial management, a more enabling business environment, and targeted investments in high-impact sectors.

Private sector development remains central to the plan, with ADB set to support reforms aimed at reducing regulatory burdens, improving infrastructure, expanding access to finance, and promoting public-private partnerships.

Key Sectors Identified for Transformation​

The Country Partnership Strategy identifies several sectors with transformative potential. These include critical minerals, railways and multimodal connectivity, energy security and clean energy, as well as skills development and employment generation.

ADB also plans to deploy integrated solutions combining policy reforms, sovereign and non-sovereign financing, technical assistance, and knowledge support to address emerging challenges.

Inclusion, Climate Resilience, and Human Capital Development​

To advance inclusion and empowerment, the bank will prioritize investments in human capital, improve access to quality social services, and promote women’s participation in the economy.

Given Pakistan’s vulnerability to extreme weather events, resilience and sustainability form a core pillar of the strategy. Planned support includes initiatives in disaster risk management, climate adaptation and mitigation, water resource management, agricultural value chains, food security, and air quality improvement.

Economic Recovery and Key Indicators​

The ADB noted that Pakistan’s economy has shown signs of stabilization and recovery after a period of volatility.

Gross domestic product expanded by 3.1 percent in FY2025, compared to a contraction of 0.2 percent in FY2023.

Inflation declined sharply to 4.5 percent in FY2025 from 23.4 percent in FY2024, falling below the State Bank of Pakistan’s target range of 5 to 7 percent.

The current account balance also improved significantly, moving from a deficit of 4.7 percent of GDP in FY2022 to a surplus of 0.5 percent in FY2025, marking the first surplus since FY2011.

Challenges Remain Despite Growth Momentum​

Despite improving indicators, the report highlights several structural challenges that need to be addressed. These include a narrow production and export base, a burdensome business environment, and imbalances in public financial management.

The ADB stated that carefully sequenced reforms and well-designed investments will be essential to unlocking sustained growth while enhancing inclusion and resilience.

It added that leveraging Pakistan’s young workforce and natural resource base will be critical in achieving long-term development gains and enabling a transition to a more robust and sustainable economic model.