Pakistan’s sharp decline in poverty has stalled in recent years due to economic shocks and a lack of structural reforms, the World Bank said on Tuesday.
The international lender said that between 2001 and 2015, a wave of urbanization helped reduce the national poverty rate from 64% to 22% by 2019, as rural workers moved into informal urban jobs in sectors like transport, construction, and trade.
A World Bank blog, of Sept 23, 2025 stated that ~44.7% of Pakistani people are living below the Poverty Line (as per its new criteria of USD 4.2/ day).
Add impacts of the current floods to understand true magnitude of poverty, ie 11-12 crore people are below the poverty line! pic.twitter.com/VQUMEPmMnn
— Ahmad Nawaz Sukhera (@ansukhera) September 24, 2025
However, that progress has since slowed, with poverty rising to 25% by 2024.
Read more: No pause for food delivery riders during Pakistan’s monsoon
“The growth model that supported initial poverty reduction has proven insufficient to sustain progress,” said a World Bank study. “Pakistan’s once-promising poverty reduction trajectory has come to a troubling halt, reversing years of progress.”
Fragile growth model
The report cited numerous shocks — including the COVID-19 pandemic, global inflation following the Ukraine war, and devastating floods in 2022 — as key setbacks.
Pakistan’s “Hybrid” growth model is collapsing:
– Poverty: 25% (national), 45% (intl)
– 37% youth NEET (neither in work nor education)
– GDP per capita growth ~2% (half South Asia)
– Debt trap: >70% of GDP, interest eats 50% of revenue
– Exports stagnant at ~$30bn vs Bangladesh…— Sayed Z Bukhari (@sayedzbukhari) September 24, 2025
It also pointed to weak fundamentals: low productivity in labor-absorbing sectors, poor public services, and limited access to education and training.
Many who escaped poverty remained just above the threshold, leaving them vulnerable to economic disruptions. The study used Pakistan’s national poverty line; international measures suggest even higher rates.
Since BISP’s launch in 2008-09, Pakistan’s national poverty headcount has fallen from 44.1% to 21.9% by 2018-19 — a historic decline driven under PPP’s vision for social protection.@BBhuttoZardari pic.twitter.com/1RmKNsC5HJ
— Sumeta Afzal Syed (@SumetaSyed) September 23, 2025
Further flooding in 2025 again hit growth, though less severely than in 2022.
Read more: Trump lashes out as suspended TV host Kimmel returns to air
Khurram Schehzad, adviser to the finance minister, acknowledged recent setbacks but said the government had expanded welfare programs, invested in job creation, and was working to better target subsidies.
“These priorities are aligned with the broader reform agenda, ensuring that Pakistan not only cushions vulnerable households against shocks but also creates the conditions for inclusive and sustained poverty reduction,” Schehzad said.