This is the most expensive country to live in Asia, its not Singapore, UAE, Japan, China, India, Malaysia, Hong Kong, the name is…, its a Muslim nation

Pakistan already had highest living cost amongst South Asian nations, and now, the country has become the most expensive to live in all of Asia, due to a critical inflation rate of 25 percent in FY25.

Written by: Gazi Abbas Shahid

Published: March 20, 2025, 7:22 PM IST

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Cash-strapped Pakistan, which is battling a crumbling economy, has earned the dubious distinction of being the costliest country to live in across all of Asia, a recent report has revealed. According to a study by Asian Development Bank (ADB), Pakistan is facing a severe economic crisis, with inflation hitting peak levels at 25 percent, making it the country with the most expensive living costs in Asia.

As per the ADB report released Thursday in Philippines capital Manila, Pakistan’s economy faces a bleak future over the next fiscal with inflation expect to hover around the 15 percent mark, the highest amongst 46 countries in Asia. The ADB has forecasted a growth rate of 2.8 percent for Pakistan for FY24-25, the fifth lowest in the region.

According to the financial body, earlier, Pakistan already had highest living cost amongst South Asian nations, and now, the country has become the most expensive to live in all of Asia, due to a critical inflation rate of 25 percent in FY25. The ADB noted that State Bank of Pakistan (SDB) will miss the inflation target of 21 percent, despite the government imposing a staggering 22 percent interest rate.

Pakistan to clock low growth rate

Pakistan is expected to clock the fourth lowest growth rate of 1.9 per cent in FY25 behind Myanmar, Azerbaijan, and Nauru, the report said, adding that the country remains in a ‘stagflation phase’.  Citing the World Bank, the ADB report said that around 10 million more people in Pakistan are likely to victims of poverty trap due to any adverse shock.

At present, around 98 million Pakistanis, a major chunk of the the country’s 250 million population, are living below the poverty line.

As per the report, Pakistan would likely keep facing challenges from major external financial requirements and old debt, aggravated by global monetary conditions, in addition to political instability, which would pose a risk to reform efforts. “Further IMF support for a medium-term reform agenda would considerably improve market sentiment and catalyze affordable external financing from other sources,” it added.