Pakistan’s poverty rate has climbed sharply to around 29 per cent in the fiscal year 2024‑25, the highest level recorded in more than a decade. At the same time, income inequality has widened to its highest point in nearly 30 years, reflecting a sustained decline in real incomes and household consumption across the country, according to a government survey released by Planning Minister Ahsan Iqbal on Friday
The new estimates, based on the Household Integrated Economic Survey (HIES) 2024‑25 and compiled by the Poverty Estimation Committee, reveal that approximately 70 million people are now living below the national poverty threshold of Rs8,484 per adult per month. This line is defined as the minimum level of expenditure needed to meet basic needs.
Rising Poverty Across Regions
The poverty surge represents a reversal of the downward trend seen in earlier years. In 2018‑19, the national poverty rate was 21.9 per cent. Over the past six to seven years it has climbed by about 6.9 percentage points, reaching nearly 29 per cent in 2024‑25.
Poverty has risen in both rural and urban areas, although it remains more pronounced in rural communities. Rural poverty increased from around 28 per cent to more than 36 per cent, while urban poverty rose from about 11 per cent to 17 per cent.
Regional data show significant variation:
- Punjab’s poverty rate has increased from roughly 16.5 per cent to around 23.3 per cent.
- Sindh has seen a rise from about 24.5 per cent to 32.6 per cent.
- Khyber Pakhtunkhwa moved from 28.7 to more than 35 per cent.
- Balochistan remains the most affected province, with nearly half of its population living below the poverty line.
Income Inequality and Employment
The survey also shows a broad increase in income inequality, measured by the Gini coefficient. National inequality rose to 32.7, the highest level recorded since 1998. Provincial inequality measures show similar upward trends.
Alongside rising poverty, unemployment has reached a 21‑year high of 7.1 per cent, underscoring labour market weaknesses. Large‑scale manufacturing activity remains below pre‑pandemic levels, constraining formal job creation and limiting household income recovery.
Drivers of the Trend
Officials and analysts point to a combination of domestic and external factors that have contributed to the deteriorating situation:
- Inflation and Exchange Rate Pressures: Real household incomes have fallen as inflation outpaced nominal income growth. Between 2019 and 2024‑25, average real monthly income dropped by around 12 per cent, while real expenditure also declined.
- Macroeconomic Adjustments: Stabilisation measures under successive IMF programmes, including fiscal consolidation, subsidy reductions, energy tariff adjustments, and higher indirect taxes, have increased the cost of living.
- Domestic and Global Shocks: The economy has faced persistent challenges from global commodity price volatility, subdued growth, the economic fallout from the COVID‑19 pandemic, and devastating climate events such as the 2022 floods.
Minister Iqbal acknowledged that poverty and inequality have risen due to a combination of policy choices and structural weaknesses. He noted that measures such as the Benazir Income Support Programme provide important relief but are insufficient on their own to reverse the trend without broader growth and employment expansion.
Policy Implications and Future Outlook
The reversal in poverty trends marks a significant development in Pakistan’s socio‑economic trajectory. After years of steady decline, the increase underscores the limits of recent economic policies in protecting living standards and equitable growth.
Officials have highlighted the need to focus on inclusive strategies that promote export‑led growth, strengthen social protection networks, and generate employment. Sustained improvements in education, health access, and rural development will be critical to reducing poverty and narrowing inequality over the medium term.
