ISLAMABAD: Pakistan continues facing fiscal pressures that constrain investment in essential services and inclusive development, the Asian Development Bank (ADB) said on Thursday.
In its annual report, titled “Solving Complex Challenges Together Scaling Up for Impact”, the Bank noted that it made fresh commitments worth USD3.672 billion to Pakistan in 2025, up 22 percent from USD2.995 billion the previous year.
The report further noted that the new financial support commitments of USD1.485 billion were pledged to the public sector for the year, against USD1.113 billion in 2024.
Most of these loan commitments were made on ordinary commercial terms.
The report stated that in 2025, the ADB committed an USD800 million package—including a USD300 million policy-based loan and up to USD500 million policy-based guarantee—that enables the government to mobilize USD1 billion in additional financing.
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The program aims to reduce public deficits and debt to create more space for social spending. It focuses on improving tax policy, administration, and compliance; enhancing public expenditure and cash management; and promoting digitalization and private investment.
The report noted that in Pakistan, a policy-based guarantee is helping mitigate credit risk for commercial bank lending to smaller enterprises and mobilize commercial financing of USD1 billion.
The Bank also stated that Pakistan continues to face one of the world’s widest gaps in economic participation, largely due to women’s limited access to finance and their low representation in formal employment. To help close the finance gap— estimated at 37%—ADB committed USD350 million to foster business ventures owned by women.
The support comprises a USD300 million policy-based loan to strengthen legal and regulatory frameworks to include women and a USD50 million financial intermediation loan to expand credit and guarantees for women entrepreneurs.
The program aims to empower 2 million women, enhance their entrepreneurial abilities, and advance reforms that promote equitable economic opportunities nationwide.
Helping create the next generation of women entrepreneurs and professionals, the ADB committed a policy-based loan to extend science, technology, engineering, and mathematics (STEM) education in Punjab.
The program will finance the construction of at least 1,700 multipurpose STEM laboratories in selected schools, at least 50 percent of which will be established in girls’ schools, with a particular focus on marginalized communities where negative social norms discourage female students’ STEM participation. ADB’s USD100 million loan for the programme is accompanied by a USD7 million grant from the ADF, it added.
Copyright Business Recorder, 2026
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