Poverty in Pakistan has surged to its highest level in 11 years, with almost 29% of the population now living below the poverty line, as per a report released by Planning Minister Ahsan Iqbal. The report revealed that approximately 70 million people are enduring extreme poverty, based on a monthly poverty line of Rs 8,484, which is deemed essential to meet basic needs. Preliminary findings for the fiscal year 2024-25 indicate a 32% increase in poverty since 2018-19, the last time a survey was conducted.
The poverty rate in 2019 was 21.9%, but during the initial year of Prime Minister Shehbaz Sharif’s current government, it escalated to 28.9%. This marks the highest level since 2014 when poverty was documented at 29.5%, according to the report. Income inequality has also intensified significantly, with the survey indicating a rise to 32.7, the highest in 27 years.
Pakistan is grappling with its highest unemployment rate in 21 years at 7.1%. The planning minister acknowledged that economic stabilization measures under the International Monetary Fund (IMF) program have contributed to the upsurge in poverty. Factors such as the removal of subsidies, devaluation of the exchange rate, high inflation, natural calamities, and sluggish economic growth have collectively propelled more individuals into poverty.
The report underscores a reversal in the trend of poverty reduction for the first time in 13 years. Rural areas have been disproportionately affected, witnessing an increase in poverty from 28.2% to 36.2%. Urban poverty also saw a rise from 11% to 17.4%, as per the report. Across provinces, the situation has deteriorated, with Punjab experiencing a rise in poverty from 16.5% to 23.3% over seven years.
In Sindh, poverty escalated from 24.5% to 32.6%, while in Khyber Pakhtunkhwa, the rate climbed from 28.7% to 35.3%. Balochistan remains the most impacted province, where nearly half the population lives in poverty, with the rate surging from 42% to 47%, as per the report. Real monthly household income dropped by 12% from Rs 35,454 in 2019 to Rs 31,127 in the last fiscal year. Real monthly household spending also decreased by over 5% during the same period, despite nominal income increases, as inflation outpaced earnings, diminishing purchasing power.
