ISLAMABAD, April 10 -- The Asian Development Bank (ADB) has said that while Pakistan's economy is showing signs of gradual recovery, significant risks continue to threaten long-term stability.

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In its latest report on Pakistan's economic outlook, the ADB noted that macroeconomic conditions are improving, but external and internal vulnerabilities remain a concern. The bank projected that Pakistan's economic growth will reach 3.5 percent in the current fiscal year, with an expected increase to 4.5 percent in the next fiscal year.

The report highlighted that inflation is likely to remain elevated in the coming years. It estimated inflation at 6.4 percent in fiscal year 2026, with a slight r...