ISLAMABAD: Pakistan’s gains in poverty reduction have reversed in recent years, with the national poverty rate climbing to 25.3 percent in 2023-24 after falling steadily for nearly two decades, the World Bank said on Tuesday.
The findings were released in a new assessment, Reclaiming Momentum Towards Prosperity: Pakistan’s Poverty, Equity and Resilience Assessment, the first comprehensive review of poverty and welfare trends since the early 2000s.
Drawing on two decades of household surveys and projections, the report warns that Pakistan’s earlier progress has stalled, eroded by economic shocks and weak policy.
“After a steady decline from 64.3 percent in 2001-02 to 21.9 percent in 2018-19, the national poverty rate began to increase in 2020,” said Christina Wieser, a senior economist and one of the report’s lead authors. “Since 2021, poverty has begun to rise, exacerbated by COVID-19, the 2022 floods, inflation and faltering policies and reached 25.3 percent in 2023-24.”
She stressed the need for bold, sustained and people-centered reforms to reduce poverty, strengthen resilience and protect vulnerable populations, adding: “Reforms that expand access to quality services, protect households from shocks and create better jobs, especially for the bottom 40 percent are essential to break cycles of poverty and deliver durable, inclusive growth.”
The World Bank in June raised its global poverty threshold to $4.20 a day, under which about 44.7 percent of Pakistanis fall.
Bolormaa Amgaabazar, the Bank’s country director for Pakistan, said this figure was not directly comparable to the national estimate of 25.3 percent, as the two are based on different benchmarks.
“They are not comparable,” he said. “The 45 percent is based on the upper middle-income poverty line that is the global poverty line, and the 25.3 percent is based on the national poverty line and projections based on that.”
Amgaabazar urged Pakistan to protect earlier poverty gains while accelerating reforms.
“By focusing on results — investing in people, places and access to opportunities, building resilience against shocks, prioritizing fiscal management and developing better data systems for decision-making — Pakistan can put poverty reduction back on track,” he said.
The report found that much of Pakistan’s poverty reduction over the past 20 years was driven by households moving from farm work into low-paying service jobs, but slow structural change has limited diversification, job creation and income growth.
The World Bank outlined four pathways to restore progress, including investing in human capital and local services, building household resilience through stronger safety nets, adopting progressive fiscal measures such as phasing out subsidies in favor of targeted spending and improving data systems to guide policy.
Pakistan has received over $48.3 billion in World Bank assistance since joining in 1950.
The Bank’s current portfolio in the country includes 54 projects with total commitments of $15.7 billion.
