World Bank Raises Alarm as Pakistan’s Poverty Rate Rises to 25.3%

The World Bank has released a detailed report on poverty trends in Pakistan, revealing a sharp increase in poverty over the past three years. As per the report, Pakistan’s poverty rate has climbed from 18.3% in 2022 to 25.3% in 2024–25.

This 7% increase is concerning, especially given that between 2001 and 2015, Pakistan was seeing an average 3% reduction in poverty per year, and 1% annually from 2015 to 2018. Since 2018/19, no household surveys have been conducted, leaving data gaps. However, the post-2020 economic fallout from COVID-19 and inflationary pressures have reversed earlier progress.

Key findings from the report include:

• 57% of poverty reduction came from non-agricultural income sources.

• Only 18% of poverty reduction was attributed to agricultural income.

• Remittances and other income channels also contributed positively.

The report further highlights a growing dependence on informal labor, with 95% of the workforce employed in informal sectors, and 85% of low-income earners working without job security or formal protections.

Urban areas now house 39% of the population, creating significant pressure on infrastructure, employment, and basic services. The World Bank warns that without strong and inclusive economic policies, poverty could deepen, especially among urban poor and informal workers.