Poverty in Pakistan has climbed sharply, with the national rate rising from 22 per cent to 29 per cent, according to the World Bank’s latest economic report on the country. The Pakistan poverty rate 29% finding means roughly seven in every hundred Pakistanis who were above the poverty line in 2018-19 have fallen below it.
The report points to a painful mismatch: the workforce is growing, but the jobs it needs are not. Around 3.6 million people reach working age in Pakistan each year, yet one in every six people entering the labour market since 2018 has remained without employment.
Pakistan poverty rate 29%: why jobs are not keeping up
The numbers behind the rise are stark. Pakistan’s unemployment rate stood at 7 per cent in 2024, with women and young people making up a disproportionately large share of those without work.
The country did create 17.7 million jobs since 2018, but most were in low-wage, low-productivity sectors. Those jobs did little for household incomes or living standards, the report said, because they offered neither decent pay nor a path to better earnings.
Productivity is the deeper problem. Labour productivity grew by just 0.4 per cent a year between 2014 and 2024, the World Bank found. An economy that adds workers without making them more productive cannot raise wages, and households stay poor even when they are working.
The Bank attributed the seven percentage point increase in poverty partly to severe inflation and sluggish economic growth. Rising living costs have squeezed households, while limited productivity gains have kept workers from earning more.
The wider economic picture
The poverty findings sit alongside other grim readings from the same reporting season. The World Bank has separately projected that inflation will rise to 8.2 per cent next fiscal year, driven by energy and food costs, the same pressures the poverty report blames for eroding household incomes.
Those pressures are visible at the household level. LPG prices hit a record Rs600 per kg in parts of the country this month, far above the official notified rate, and the government only just cut petrol prices by Rs5.16 per litre. For families spending most of their income on necessities, each price shock pushes more of them toward the poverty line.
Finance Minister Muhammad Aurangzeb has acknowledged the challenge. Speaking on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, he said tackling poverty starts with acknowledging it, and pointed to Rs838 billion allocated for the Benazir Income Support Programme, with Kafaalat payments set to rise in January. He added that targeted fuel subsidies had reached about 10 million users, but conceded that cash transfers alone cannot fix poverty and that job creation through growth is the long-term answer, according to Arab News.
The honest caveat is that acknowledgement is not a plan. The report’s core message is structural: Pakistan needs faster, more productive growth that creates better jobs, not just more jobs. Until productivity rises above its 0.4 per cent crawl, each new cohort of 3.6 million workers will face the same lottery of low-wage work or none at all.
Frequently asked questions
What is Pakistan’s poverty rate now?
The World Bank’s latest report puts the national poverty rate at 29 per cent in 2024-25, up from about 22 per cent in 2018-19.
Why did poverty rise despite job creation?
Pakistan created 17.7 million jobs since 2018, but most were in low-wage, low-productivity sectors. One in six new labour-market entrants since 2018 found no work at all.
How weak is Pakistan’s productivity growth?
Labour productivity grew by just 0.4 per cent a year between 2014 and 2024, which the World Bank says limits workers’ ability to earn higher incomes.
What is the government doing about it?
The finance minister pointed to Rs838 billion for the Benazir Income Support Programme, a Kafaalat payment increase in January, and targeted fuel subsidies reaching about 10 million users, while saying job creation through growth is the long-term answer.
