diff --git a/integration_test.go b/integration_test.go
index 08c25fa..dbc3000 100644
--- a/integration_test.go
+++ b/integration_test.go
@@ -1,6 +1,7 @@
 package main
 
 import (
+	"context"
 	"fmt"
 	"net/http"
 	"net/http/httptest"
@@ -783,3 +784,251 @@ func (suite *Tests) TestRequestCoalescingIntegration() {
 		}
 	})
 }
+
+// TestRetryBudgetIntegration tests that retry budget correctly limits retry attempts
+func (suite *Tests) TestRetryBudgetIntegration() {
+	// Initialize a retry budget with limited tokens for testing
+	budgetCtx := context.Background()
+	testBudget := NewRetryBudgetWithContext(budgetCtx, RetryBudgetConfig{
+		MaxTokens:       3, // Only allow 3 retries total
+		TokensPerSecond: 0, // Don't refill during test
+		Enabled:         true,
+	}, cfg.Logger)
+
+	// Replace global retry budget
+	originalBudget := retryBudget
+	retryBudget = testBudget
+	defer func() {
+		testBudget.Shutdown()
+		retryBudget = originalBudget
+	}()
+
+	suite.Run("retry_budget_limits_retries", func() {
+		testBudget.Reset()
+
+		// Verify retry budget is set and works correctly
+		rb := GetRetryBudget()
+		suite.NotNil(rb, "Retry budget should be set")
+		suite.True(rb.enabled, "Retry budget should be enabled")
+		suite.T().Logf("Retry budget: enabled=%v, tokens=%d", rb.enabled, rb.currentTokens.Load())
+
+		// Test that AllowRetry consumes tokens correctly
+		initialTokens := rb.currentTokens.Load()
+		suite.Equal(int64(3), initialTokens, "Should start with 3 tokens")
+
+		// First 3 retries should be allowed
+		suite.True(rb.AllowRetry(), "First retry should be allowed")
+		suite.True(rb.AllowRetry(), "Second retry should be allowed")
+		suite.True(rb.AllowRetry(), "Third retry should be allowed")
+
+		// Fourth retry should be denied (tokens exhausted)
+		suite.False(rb.AllowRetry(), "Fourth retry should be denied - budget exhausted")
+
+		// Verify stats
+		stats := rb.GetStats()
+		suite.Equal(int64(4), stats["total_attempts"].(int64), "Should have 4 total attempts")
+		suite.Equal(int64(3), stats["allowed_retries"].(int64), "Should have 3 allowed retries")
+		suite.Equal(int64(1), stats["denied_retries"].(int64), "Should have 1 denied retry")
+
+		suite.T().Logf("Retry budget stats: total=%d, allowed=%d, denied=%d",
+			stats["total_attempts"], stats["allowed_retries"], stats["denied_retries"])
+	})
+
+	suite.Run("retry_budget_exhaustion", func() {
+		// Create a new budget with only 1 token
+		testBudget.Shutdown()
+		budgetCtx2 := context.Background()
+		testBudget2 := NewRetryBudgetWithContext(budgetCtx2, RetryBudgetConfig{
+			MaxTokens:       1, // Only allow 1 retry
+			TokensPerSecond: 0, // Don't refill
+			Enabled:         true,
+		}, cfg.Logger)
+		retryBudget = testBudget2
+		defer func() {
+			testBudget2.Shutdown()
+		}()
+
+		// Test budget exhaustion with 1 token
+		rb := GetRetryBudget()
+		suite.NotNil(rb, "Retry budget should be set")
+		suite.Equal(int64(1), rb.currentTokens.Load(), "Should start with 1 token")
+
+		// First retry should be allowed
+		suite.True(rb.AllowRetry(), "First retry should be allowed")
+
+		// Second retry should be denied (only 1 token available)
+		suite.False(rb.AllowRetry(), "Second retry should be denied - budget exhausted")
+
+		// Verify stats
+		stats := rb.GetStats()
+		suite.Equal(int64(2), stats["total_attempts"].(int64), "Should have 2 total attempts")
+		suite.Equal(int64(1), stats["allowed_retries"].(int64), "Should have 1 allowed retry")
+		suite.Equal(int64(1), stats["denied_retries"].(int64), "Should have 1 denied retry")
+
+		suite.T().Logf("Retry budget stats: total=%d, allowed=%d, denied=%d",
+			stats["total_attempts"], stats["allowed_retries"], stats["denied_retries"])
+	})
+}
+
+// TestConnectionPoolStatsIntegration tests that connection pool stats are tracked
+func (suite *Tests) TestConnectionPoolStatsIntegration() {
+	// Save original config
+	originalClient := cfg.Client.FastProxyClient
+	originalHostGraphQL := cfg.Server.HostGraphQL
+	originalCoalescing := cfg.RequestCoalescing.Enable
+
+	// Restore after test
+	defer func() {
+		cfg.Client.FastProxyClient = originalClient
+		cfg.Server.HostGraphQL = originalHostGraphQL
+		cfg.RequestCoalescing.Enable = originalCoalescing
+	}()
+
+	// Disable request coalescing for accurate tracking
+	cfg.RequestCoalescing.Enable = false
+
+	suite.Run("connection_success_tracked", func() {
+		// Create test server that succeeds
+		server := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+			w.Header().Set("Content-Type", "application/json")
+			w.WriteHeader(http.StatusOK)
+			_, _ = w.Write([]byte(`{"data":{"test":"success"}}`))
+		}))
+		defer server.Close()
+
+		cfg.Server.HostGraphQL = server.URL
+		cfg.Client.ClientTimeout = 5
+		cfg.Client.FastProxyClient = createFasthttpClient(cfg)
+
+		// Initialize connection pool
+		InitializeConnectionPool(cfg.Client.FastProxyClient)
+		defer ShutdownConnectionPool()
+
+		poolMgr := GetConnectionPoolManager()
+		suite.NotNil(poolMgr, "Connection pool manager should be initialized")
+
+		// Get stats before
+		statsBefore := poolMgr.GetConnectionStats()
+		successBefore := statsBefore["total_connections"].(int64)
+
+		// Make a successful request
+		reqCtx := &fasthttp.RequestCtx{}
+		reqCtx.Request.SetRequestURI("/graphql")
+		reqCtx.Request.Header.SetMethod("POST")
+		reqCtx.Request.Header.Set("Content-Type", "application/json")
+		reqCtx.Request.SetBody([]byte(`{"query": "query { test }"}`))
+
+		ctx := suite.app.AcquireCtx(reqCtx)
+		err := proxyTheRequest(ctx, cfg.Server.HostGraphQL)
+		suite.app.ReleaseCtx(ctx)
+
+		suite.Nil(err, "Request should succeed")
+
+		// Get stats after
+		statsAfter := poolMgr.GetConnectionStats()
+		successAfter := statsAfter["total_connections"].(int64)
+
+		suite.Greater(successAfter, successBefore,
+			"Total connections should increase after successful request")
+	})
+
+	suite.Run("connection_failure_tracked_on_5xx", func() {
+		// Create test server that returns 503
+		// Note: 503 triggers retry which records failures
+		server := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+			w.WriteHeader(http.StatusServiceUnavailable)
+			_, _ = w.Write([]byte(`{"errors":[{"message":"Service unavailable"}]}`))
+		}))
+		defer server.Close()
+
+		cfg.Server.HostGraphQL = server.URL
+		cfg.Client.ClientTimeout = 2
+		cfg.Client.FastProxyClient = createFasthttpClient(cfg)
+
+		// Initialize connection pool
+		InitializeConnectionPool(cfg.Client.FastProxyClient)
+		defer ShutdownConnectionPool()
+
+		poolMgr := GetConnectionPoolManager()
+		suite.NotNil(poolMgr, "Connection pool manager should be initialized")
+
+		// Get stats before
+		statsBefore := poolMgr.GetConnectionStats()
+		failuresBefore := statsBefore["connection_failures"].(int64)
+
+		// Make a failing request (503 is retryable, so it will retry and track failures)
+		reqCtx := &fasthttp.RequestCtx{}
+		reqCtx.Request.SetRequestURI("/graphql")
+		reqCtx.Request.Header.SetMethod("POST")
+		reqCtx.Request.Header.Set("Content-Type", "application/json")
+		reqCtx.Request.SetBody([]byte(`{"query": "query { fail }"}`))
+
+		ctx := suite.app.AcquireCtx(reqCtx)
+		_ = proxyTheRequest(ctx, cfg.Server.HostGraphQL)
+		suite.app.ReleaseCtx(ctx)
+
+		// Get stats after - should have failures from retry attempts
+		statsAfter := poolMgr.GetConnectionStats()
+		failuresAfter := statsAfter["connection_failures"].(int64)
+
+		suite.Greater(failuresAfter, failuresBefore,
+			"Connection failures should increase after 5xx responses that trigger retries")
+
+		suite.T().Logf("Connection failures: before=%d, after=%d",
+			failuresBefore, failuresAfter)
+	})
+
+	suite.Run("stats_reflect_request_outcomes", func() {
+		// This test verifies that connection stats properly reflect the
+		// combination of successes and failures over multiple requests
+
+		// Start with a fresh server
+		var requestCount atomic.Int32
+		server := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+			count := requestCount.Add(1)
+			// First 2 requests succeed, rest fail
+			if count <= 2 {
+				w.Header().Set("Content-Type", "application/json")
+				w.WriteHeader(http.StatusOK)
+				_, _ = w.Write([]byte(`{"data":{"test":"success"}}`))
+			} else {
+				w.WriteHeader(http.StatusInternalServerError)
+				_, _ = w.Write([]byte(`{"errors":[{"message":"Error"}]}`))
+			}
+		}))
+		defer server.Close()
+
+		cfg.Server.HostGraphQL = server.URL
+		cfg.Client.ClientTimeout = 2
+		cfg.Client.FastProxyClient = createFasthttpClient(cfg)
+
+		// Initialize connection pool
+		InitializeConnectionPool(cfg.Client.FastProxyClient)
+		defer ShutdownConnectionPool()
+
+		poolMgr := GetConnectionPoolManager()
+		suite.NotNil(poolMgr, "Connection pool manager should be initialized")
+
+		// Make 2 successful requests
+		for i := 0; i < 2; i++ {
+			reqCtx := &fasthttp.RequestCtx{}
+			reqCtx.Request.SetRequestURI("/graphql")
+			reqCtx.Request.Header.SetMethod("POST")
+			reqCtx.Request.Header.Set("Content-Type", "application/json")
+			reqCtx.Request.SetBody([]byte(`{"query": "query { test }"}`))
+
+			ctx := suite.app.AcquireCtx(reqCtx)
+			_ = proxyTheRequest(ctx, cfg.Server.HostGraphQL)
+			suite.app.ReleaseCtx(ctx)
+		}
+
+		// Get stats after successes
+		statsAfterSuccess := poolMgr.GetConnectionStats()
+		totalConnections := statsAfterSuccess["total_connections"].(int64)
+
+		suite.GreaterOrEqual(totalConnections, int64(2),
+			"Should have at least 2 successful connections tracked")
+
+		suite.T().Logf("Total connections after 2 successful requests: %d", totalConnections)
+	})
+}
diff --git a/proxy.go b/proxy.go
index 6dcbc64..e5070bc 100644
--- a/proxy.go
+++ b/proxy.go
@@ -454,19 +454,36 @@ func executeProxyAttempt(c *fiber.Ctx, proxyURL string) error {
 		return retry.Unrecoverable(fmt.Errorf("fiber context became nil during retry"))
 	}
 
+	// Get connection pool manager for stats tracking
+	poolMgr := GetConnectionPoolManager()
+
 	// Execute the proxy request
-	if err := doProxyRequestWithTimeout(c, proxyURL, cfg.Client.FastProxyClient); err != nil {
+	proxyErr := doProxyRequestWithTimeout(c, proxyURL, cfg.Client.FastProxyClient)
+	if proxyErr != nil {
 		// Check if this is a connection error
-		if isConnectionError(err) {
+		if isConnectionError(proxyErr) {
 			notifyHealthManager(false)
-			return err // Connection errors are retryable
+			// Track connection failure
+			if poolMgr != nil {
+				poolMgr.RecordConnectionFailure()
+			}
+			return proxyErr // Connection errors are retryable
 		}
 
 		// Check if this is a timeout error - don't retry timeouts
-		if isTimeoutError(err) {
-			return retry.Unrecoverable(err)
+		if isTimeoutError(proxyErr) {
+			return retry.Unrecoverable(proxyErr)
 		}
-		return err
+
+		// Check if this is a retryable HTTP error (e.g., 503)
+		// These indicate the server responded but with an error status
+		if strings.Contains(proxyErr.Error(), "non-200 response") {
+			// Track as a failure for retryable HTTP errors
+			if poolMgr != nil {
+				poolMgr.RecordConnectionFailure()
+			}
+		}
+		return proxyErr
 	}
 
 	// Safety check before accessing response
@@ -481,10 +498,18 @@ func executeProxyAttempt(c *fiber.Ctx, proxyURL string) error {
 	if err == nil {
 		// Success case
 		notifyHealthManager(true)
+		// Track successful connection
+		if poolMgr != nil {
+			poolMgr.RecordConnectionSuccess()
+		}
 		return nil
 	}
 
 	if shouldRetry {
+		// Track connection failure for retryable errors (5xx, etc)
+		if poolMgr != nil {
+			poolMgr.RecordConnectionFailure()
+		}
 		return err // Retryable error
 	}
 
@@ -541,31 +566,51 @@ func performProxyRequestWithEnhancedRetries(c *fiber.Ctx, proxyURL string, backe
 		retry.LastErrorOnly(true),
 		retry.RetryIf(func(err error) bool {
 			// Don't retry if context is cancelled or context is nil
-			defer func() {
-				// Recover from any panic when accessing context
-				if r := recover(); r != nil {
-					// If we panic, don't retry
-					return
-				}
-			}()
-
 			if c == nil {
 				return false
 			}
 
-			// Try to safely access the context
-			ctx := c.Context()
-			if ctx == nil {
+			// Safely check if context is done/cancelled
+			// Note: fasthttp.RequestCtx.Done() can panic if not properly initialized
+			// If we panic, don't retry (maintains backward compatibility with test behavior)
+			shouldRetry := true
+			func() {
+				defer func() {
+					if r := recover(); r != nil {
+						// If we panic accessing context, don't retry
+						// This typically happens in test scenarios with mock contexts
+						shouldRetry = false
+					}
+				}()
+				ctx := c.Context()
+				if ctx == nil {
+					return
+				}
+				select {
+				case <-ctx.Done():
+					shouldRetry = false
+				default:
+				}
+			}()
+
+			if !shouldRetry {
 				return false
 			}
 
-			// Check if context is done/cancelled
-			select {
-			case <-ctx.Done():
-				return false
-			default:
-				return true
+			// Check retry budget before allowing retry
+			if rb := GetRetryBudget(); rb != nil {
+				if !rb.AllowRetry() {
+					cfg.Logger.Warning(&libpack_logger.LogMessage{
+						Message: "Retry denied by budget",
+						Pairs: map[string]interface{}{
+							"path":  c.Path(),
+							"error": err.Error(),
+						},
+					})
+					return false
+				}
 			}
+			return true
 		}),
 	)
 }