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Pakistan's Poverty Rate Soars to 28.9% as Inequality Widens, Report Reveals

A new report from Pakistan's Planning Commission reveals a sharp increase in both poverty and inequality over the past six years. The national poverty rate climbed from 21.9% to 28.9%, with rural areas hit hardest at 36.3%. This decline is attributed to irresponsible economic policies, the COVID-19 pandemic, devastating floods, and IMF-mandated austerity measures. The Planning Minister presented the report, advocating for export-led growth and enhanced social protection programs to reverse the trend.

Key Points: Pakistan Poverty & Inequality Rise: Report Shows Economic Decline

  • Poverty rose from 21.9% to 28.9%
  • Rural poverty surged to 36.3%
  • Unemployment increased to 7.1%
  • Real household income fell 27.5%
2 min read

Poverty, inequality on the rise in Pakistan

New report shows Pakistan's poverty rate jumped from 21.9% to 28.9% in six years, with falling incomes and rising unemployment driving the crisis.

"The average real household income has fallen by 27.5 per cent in the last six years - Planning Commission Report"

New Delhi, March 4

Both inequality and poverty have increased in Pakistan during the last six years, a report released by the country's Planning Commission clearly indicated.

This is based on a comparison of the level and distribution of household incomes, according to the Household Integrated Economic Survey (HIES) of 2018-19 and 2024-25, respectively, undertaken by the Pakistan Bureau of Statistics (PBS).

The worrying statistic is the rise in the incidence of national poverty from 21.9 per cent in 2018-19 to 28.9 per cent in 2024-25. Rural poverty has increased from 28.2 per cent to 36.3 per cent, while it has gone up in urban areas from 11 per cent to 17.4 per cent, according to a report in the Karachi-based Business Recorder.

The rise in the incidence of poverty is the reflection of a rising rate of unemployment, increasing inequality and falling real household incomes. The rate of unemployment has increased from 5.7 per cent in 2020-21 to 7.1 per cent in 2024-25. The average real household income has fallen by 27.5 per cent in the last six years, the report stated.

The Planning Commission report has highlighted various causes for the worsening of the living standards of the people. The first factor is irresponsible and changing economic policies. The second cause of increased poverty has been Covid-19 in 2019-20 and the large-scale devastation caused by the floods of 2022-23. Further, the presence of IMF programmes for stabilisation of the economy has led to a reduction in subsidies, a rise in indirect taxes, and big cutbacks in development spending.

The report was presented by the Planning Minister, who highlighted the need for export-led growth, focus on relatively underdeveloped districts and a better fiscal balance between the federal and the provincial governments. He emphasised the need for higher priority to social protection, with both cash transfers and poverty graduation programmes, coupled with the promotion of Small and Medium Enterprises (SMEs).

There is a need to recognise the value of this report. Not only has it highlighted the widespread decline in living standards of the people of Pakistan, but has also suggested various components of the appropriate growth strategy to reduce inequality and alleviate poverty. Hopefully, these policies will be implemented by the incumbent government, the Business Recorder article stated.

- IANS

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Reader Comments

P
Priya S
A 27.5% fall in average real household income in six years is shocking! 😔 It shows how crucial stable economic policies are. The report's focus on SMEs and social protection is spot on. We've seen similar debates here about subsidy cuts vs. welfare.
A
Aman W
The Planning Commission has done a good job with this honest assessment. "Irresponsible and changing economic policies" is a strong indictment. It's a lesson for all governments—populist measures without long-term vision hurt the poorest the most. Implementation of the suggested reforms is key.
S
Sarah B
Reading this from a development perspective. The urban-rural poverty gap widening is a major concern. Export-led growth sounds good on paper, but with global headwinds, focusing on internal markets and SMEs might be more sustainable for job creation. Hope they prioritize the underdeveloped districts.
V
Vikram M
Tough situation. The IMF conditions often lead to more pain for common people, as we know. While the report is critical, one must respectfully ask if the political leadership has the will to follow through on these recommendations, or if it will remain just another document.
K
Kavya N
Heart goes out to the families affected. Natural disasters don't see borders. The focus on cash transfers and poverty graduation programmes is essential for immediate relief. Stability in the region benefits everyone. 🙏

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