In recent weeks, international lenders have painted a slightly brighter picture of Pakistan’s economy, with the Asian Development Bank (ADB) leading the way by revising its growth estimate for the last fiscal year upward to 3% from an earlier 2.7%.

This small but notable upgrade has been echoed by the International Monetary Fund (IMF) and the World Bank, aligning with a trend of multilateral institutions harmonizing their outlooks. The revision came around the time of the IMF’s approval of a second tranche under its Extended Fund Facility (EFF) program in early December 2025.

At first glance, this seems like good news amid ongoing economic challenges. But dig a little deeper, and questions arise about the reliability of the underlying data. The 0.3% bump is largely attributed to stronger performance in the final quarter of FY2025, supposedly driven by a rebound in agriculture despite severe floods in June. Looking ahead, projections for the current fiscal year hover around 3.2%, but is this realistic? With acknowledged gaps in key economic statistics and weak performances in major sectors, it is worth examining whether these upgraded figures truly reflect ground realities or rely too heavily on official Pakistani data that is still under scrutiny.

The ADB’s Asian Development Outlook update in December 2025 highlighted the revision, noting a stronger-than-expected fourth quarter that pushed overall FY2025 growth to 3%. Reports suggest this was based on updated estimates from Pakistan’s government, particularly an uptick in farm output. The IMF, through a statement by Deputy Managing Director Nigel Clarke following the EFF tranche approval, appeared to align with this view, praising macroeconomic stability while the World Bank and ADB followed in a coordinated manner.

This harmonization among multilaterals isn’t unusual—they often cross-reference data to present a unified front. However, the IMF itself has long flagged significant shortcomings in Pakistan’s economic statistics. Back in its October 2024 EFF documents, the Fund committed technical assistance to fix weaknesses in Government Finance Statistics (GFS) and the Producer Price Index (PPI), noting “important shortcomings remain in the source data available for sectors accounting for around a third of GDP.” Ongoing assistance is slated to continue until at least June 2026, raising eyebrows about why growth figures are being upgraded now, based partly on the very data under improvement.

Growth estimates require vast, granular data collection—something independent think tanks or even multilaterals struggle with in Pakistan. As a result, these institutions often lean on official figures from authorities like the Pakistan Bureau of Statistics (PBS) and the Finance Division.

Agriculture is a cornerstone of Pakistan’s economy, but FY2025 was tough. The Finance Division’s updates in July and later months warned of risks from heavy rains and floods, which indeed hit hard. Official data eventually pegged agriculture growth at just 0.56%—below historical averages but positive amid challenges.

The bulk of this came from livestock (4.72% growth), fisheries (1.42%), and forestry (3.03%). While livestock is a major contributor, data on these sub-sectors—especially fisheries and forestry—is notoriously hard to verify independently. Unlike major crops, which have more traceable outputs, these rely on estimates that can be opaque. Major crops suffered declines, but the non-crop elements propped up the sector enough to contribute to the overall growth upgrade, particularly in the flood-affected final quarter.

The narrative ties the Q4 boost to farm recovery post-floods, but with climatic disruptions acknowledged in government reports, it is fair to wonder if the rebound was as robust as claimed.

Large-scale manufacturing (LSM), a key industrial driver, tells a similar story of weakness. For July-May FY2025, LSM growth was negative 1.21%, and the full-year figure came in at -0.73%. To make the overall growth revision credible, June 2025 LSM was reported at a positive 4.14%—a sharp turnaround that helped lift the annual average.

Yet, contemporaneous reports from June highlighted factory closures, rising input costs (even as the policy rate dropped to 11%), and exits by long-standing multinationals. High energy prices, competition from regional peers with lower rates, and other pressures suggest the sector was under duress. Neither agriculture nor manufacturing showed dramatic improvements, leaving the services sector to carry much of the load.

Services, now the largest GDP component, includes wholesale and retail trade—which often mirrors price movements in imperfect markets, influenced by middlemen (aarhtis) and smuggling across porous borders. This can inflate contributions without reflecting real productivity gains.

The current year’s forecast around 3.2% assumes continued stability and reform progress. But with key productive sectors showing muted growth and ongoing data issues, realism is in question. The IMF’s technical help underscores that source data for significant GDP portions remains unreliable, and full fixes are years away.

Multilaterals’ alignment on the upgrade supports Pakistan’s reform narrative, especially post-EFF tranche, but it also highlights dependence on official inputs. Independent verification is limited, making these figures vulnerable to optimism.

Pakistan’s economy has stabilized in some macros—lower inflation, better reserves—but the recent growth upgrade for FY2025 feels premature given sector weaknesses and admitted data gaps. The 3% figure, while modest, relies on hard-to-verify components and a late-quarter surge that contrasts with on-ground reports of floods, closures, and costs.

As technical assistance continues into 2026, a revisit of these numbers makes sense. True sustainable growth needs not just harmonized headlines but robust, transparent data and structural fixes in agriculture, industry, and beyond. Until then, caution is warranted: upgraded projections are welcome, but they must stand up to scrutiny for policymakers, investors, and citizens alike.