Pakistan has been declared the most expensive country among the eight countries of South Asia, while Sri Lanka has been placed in second place.
According to the outlook report of the Asian Development Bank, Pakistan’s economy is facing many challenges including high inflation, and a foreign exchange crisis.
The economic growth rate this year is likely to be only 0.6% but Pakistan can bounce back through economic and structural reforms. If the IMF program remains on track, the fiscal deficit is expected to decrease.
Read more: Pakistan economy has potential to bounce back despite hardships: ADB
According to the report on the economy of Pakistan, the average rate of inflation this year will be 27.5 percent. Industrial production will remain low due to strict monetary, and fiscal policy and the high cost of electricity and oil, while cooperation for economic recovery and development projects will continue.
According to the report, Sri Lanka is ranked second with 24.4 percent while Afghanistan is ranked third with 13.8 percent. Bangladesh ranks fourth among eight South Asian countries with 8.7 percent. Apart from this, the inflation rate in India this year is likely to be five percent.
![Local residents at the Swat River, which is overflowing due to pre-monsoon heavy rains in the area on the outskirts of Mingora, the main town of Pakistan's Swat Valley [Sherin Zada/AP]](https://mmnews.tv/wp-content/uploads/2025/06/Flooding-in-Swat-river-350x250.jpg)
