Pakistan’s national poverty rate rose from 22 percent in 2018-19 to 29 percent in 2024-25, according to the World Bank’s October 2026 Poverty and Equity Brief and its Pakistan Development Update. That is a rise of seven percentage points, leaving about 70 million people below the national poverty line. The economy grew over much of the same period, yet households got poorer. Poverty deepened, wages fell, and new jobs paid too little to lift people out.
The headline understates the damage
The brief’s depth measures matter more than the headline. The poverty gap, which measures how far below the line poor households sit, rose from 2.7 percent to 5.2 percent. Severity, which gives extra weight to the poorest, rose from 0.7 percent to 1.8 percent. Both are back near their 2011 levels. More people fell below the line, and fell further behind it. The brief says poverty rose in every province and in both rural and urban areas. The causes it cites are the pandemic, the 2022 floods, high inflation, currency depreciation and a long economic adjustment. Prices show it: the two inflation gauges that show why 11.32 percent and 10.5 percent are both true put weekly essentials inflation at 11.32 percent year on year, while the Finance Division projected October inflation at 9.5 to 10.5 percent.
A ladder the headline hides
The national line is only one rung. At the World Bank’s 3 dollar a day line, 23 percent of Pakistanis, more than 57.6 million people, lived in extreme poverty in 2024. At 4.20 dollars a day, 47.9 percent, more than 120 million people, fell below it. At 8.30 dollars a day, 87.1 percent, or 218.8 million people, fell below it. Those rungs explain why a small price shock does so much damage: most households sit close enough to the national line that one bad month, one illness, or one fuel hike can push them under it.
One misread figure needs clearing up. The Bank’s regional report found Pakistan accounted for 48 percent of the people living below the 3 dollar line in the Middle East, North Africa, Afghanistan and Pakistan region in 2024. That is Pakistan’s share of the region’s extreme poor, not 48 percent of Pakistanis.
Paychecks fell while jobs grew in the wrong places
Real wages fell by an average of 3.4 percent a year between 2018-19 and 2024-25, according to reporting of the Bank’s findings in Business Recorder via IANS. Held for six years, that pace leaves a worker roughly one fifth worse off in real terms. The Bank also reports 17.7 million net jobs created between 2018 and 2024, but says many were low paid, informal or less productive. Roughly one in six new labour force entrants has been left without work since 2018. About 3.6 million people reach working age every year, and the Bank’s lead author has said the projected growth pace is too slow to create enough jobs for them. Unemployment stood at 7 percent in 2024, higher among women and young people.
From November 1, the SBP SMEConnect portal for SME loan applications becomes the only route for small firms seeking bank finance. If small firms, which employ so many new entrants, cannot borrow affordably, the informal pattern repeats.
What the government says it will do
Finance Minister Muhammad Aurangzeb has acknowledged that poverty remains a serious challenge. He pointed to Rs838 billion allocated for the Benazir Income Support Programme, with Kafaalat payments set to increase in January, and targeted fuel subsidies that have reached 10 million users. He also said cash transfers alone cannot solve poverty, and that job creation through growth is the long term answer. The backdrop is modest: growth was an estimated 3.7 percent in the fiscal year ended June 2026, and the Bank projects 3.8 percent in fiscal 2026-27 and 4.2 percent in 2027-28. Energy costs will test it: the LPG price power shift now under review follows market cylinder prices of Rs6,000 to Rs7,200 against a notified cap near Rs3,296, and winter demand will rise.
Three tests that settle the recovery claim
First, January: does the Kafaalat increase arrive on time, at a size that beats food and fuel inflation, and for the poorest households, or does it spread thin? Second, the next household data: does the poverty gap narrow from 5.2 percent, or does depth stay near its 2011 level even if the headline rate steadies? Third, the fiscal 2026-27 jobs outcome: does projected 3.8 percent growth cut 7 percent unemployment and create work for 3.6 million new entrants, or add another year of informal jobs? Until those answers arrive, judge any recovery claim by depth, wages and jobs, not by GDP alone. For more business and economy news from Pakistan, follow the household numbers, not just the headline rate.
