Pakistan economic setback : Poverty rate reaches 25%; here is what World Bank says

The World Bank’s latest report shows that poverty in Pakistan has climbed past 25%, highlighting the urgent need for long-term, inclusive reforms to safeguard the nation’s most vulnerable communities.

The report, "Reclaiming Momentum Towards Prosperity: Pakistan's Poverty, Equity and Resilience Assessment," marks the first in-depth look at poverty and welfare in the country in over 20 years. Using more than two decades of household surveys, administrative records and spatial analysis, it paints a stark picture of growing inequality, the Dawn reported citing the report.

Pakistan’s poverty rate has climbed 7% in three years, reaching 25.3% in 2024-25, after a long decline from 64.3% in 2001-02 to 21.9% in 2018-19. The World Bank links the reversal to multiple crises, including the COVID-19 pandemic, rising inflation, severe flooding and economic instability.

The study also notes that previous poverty reduction was largely driven by a shift from farming to service-sector jobs. But the country’s economic transformation has been uneven, slowing job creation, productivity growth and economic diversification. Informal employment still dominates, making up more than 85% of all jobs, while women and young people remain largely excluded from the workforce, ANI reported citing Dawn.

Social indicators are equally worrying. Nearly 40% of children are stunted, one-quarter of primary-aged children are out of school, and three-quarters of those attending struggle with basic reading skills. Access to clean water and sanitation is limited, with only half of households having safe drinking water and nearly a third lacking proper sanitation facilities.

The World Bank also pointed to persistent regional inequality. Rural areas continue to suffer more than double the poverty seen in cities, and many historically underdeveloped districts remain trapped in the same conditions today, Dawn reported.