Key Takeaways
- Pakistan's poverty rate has increased by seven percentage points between 2018-19 and 2024-25.
- The latest Household Integrated Economic Survey shows a decline in household incomes and consumption over the past six years.
- Economic growth, averaging around three percent annually, has not been sufficient to alleviate poverty.
According to recent data from Pakistan's Household Integrated Economic Survey and Pakistan Social and Living Standards Measurement, the country’s poverty rate has risen significantly. The survey indicates that between 2018-19 (21.8%) and 2024-25 (28.9%), the percentage of people living in poverty increased by seven points. This marks a concerning trend for Pakistan, which is home to over 250 million people with a large and young labour force.
The data also reveals that rural areas have been more severely affected, with an increase of eight percentage points compared to six points in urban areas. This disparity highlights the uneven distribution of economic challenges across different regions within the country.
Perhaps even more alarming is the fact that average household incomes and consumption have fallen over the past six years. In real terms, households are earning less and consuming less than they did six years ago. This trend has persisted for a decade, indicating a lost decade in both income growth and consumption levels.
Economic policymakers face a complex challenge as they attempt to address these issues. The government’s own poverty estimates show that the country is stuck in a cycle of low economic growth, recurrent stabilisation efforts, and inadequate attempts at poverty alleviation. This cycle has been exacerbated by various shocks, both self-inflicted and external, such as macroeconomic adjustments, global pandemics, and oil price shocks.
Despite an average annual growth rate of around three percent over the past six years, this growth has not been sufficient to counteract the rise in poverty rates. As noted by Dr Ali Hasanain and other experts, these two parallel trends—low economic growth and increasing poverty—are concerning indicators of a broader systemic issue within Pakistan’s economy.
The data suggests that while some sectors may have experienced growth, the benefits have not trickled down to the majority of the population. This raises questions about the effectiveness of current economic policies and the need for more inclusive strategies to ensure shared prosperity.
Regional geopolitical events also pose additional threats to this precarious stability. The ongoing challenges in the region could further strain Pakistan’s already fragile economy, potentially leading to a worsening of poverty rates and inequality.
