ISLAMABAD: Pakistan’s economy is projected to grow by just 3% in the current fiscal year, making it the second slowest-growing economy in South Asia after Afghanistan, according to a new comparative report by the Asian Development Bank (ADB).

The ADB report forecasts overall economic growth in South Asia to reach 6% this fiscal year. India is expected to lead the region with 6.5% growth, followed by Bhutan at 6%, Bangladesh at 5%, the Maldives at 4.9%, and Sri Lanka at 3.3%. Nepal is also projected to grow by 3%, while Afghanistan will post the lowest growth rate at 1.7%.

The report notes that ADB had earlier predicted in April that Pakistan’s growth would remain at 3% — a forecast that has now been reaffirmed.

Inflation across South Asia is expected to average 4.7% during the current fiscal year. Bangladesh is likely to record the highest inflation in the region at 8%, followed by Pakistan at 6%.

Inflation in Sri Lanka and Nepal is projected at 4.5%, in India at 4.2%, in Bhutan at 3.7%, in the Maldives at 3.5%, and in Afghanistan at just 1%.

The report highlights Pakistan’s persistent economic challenges, with low growth and high inflation continuing to weigh on the country’s recovery, underscoring the need for structural reforms to stabilize the economy and achieve sustainable growth.