Pakistan poverty explodes, inequality at 27-year high as economic crisis deepens

Poverty in Pakistan has climbed to an 11-year high of 29%, while income inequality has reached its highest level in 27 years, according to an official survey released by planning minister Ahsan Iqbal on Friday. The report estimates that about 70 million people now live in extreme poverty, defined by a monthly threshold of Rs8,484 required to meet basic needs, The Express Tribune reported.

The preliminary findings for fiscal year 2024-25 show the poverty ratio rose sharply from 21.9% in 2019 to 28.9% during the first year of prime minister Shehbaz Sharif’s current government. This is the highest since 2014, when it stood at 29.5%. Inequality also surged to 32.7, the steepest level since 1998.




The country now faces a 21-year-high unemployment rate of 7.1%, alongside record inequality and an 11-year peak in poverty. The minister acknowledged that stabilisation policies linked to the International Monetary Fund programme contributed to hardship, citing subsidy withdrawals and currency devaluation that fuelled inflation. Natural disasters and weak growth were also factors, he said.

Rural poverty rose from 28.2% to 36.2%, while urban poverty increased from 11% to 17.4%. Provincial data showed similar trends: Punjab’s rate climbed from 16.5% to 23.3%, Sindh’s from 24.5% to 32.6%, Khyber-Pakhtunkhwa’s from 28.7% to 35.3%, and Balochistan’s from 42% to 47%. Security challenges in Khyber-Pakhtunkhwa and Balochistan “disrupt livelihoods, limit access to markets and essential services, and increase household vulnerability,” the report said.

Real monthly household income fell 12% to Rs31,127 over seven years, while real expenses declined 5.4%, reflecting inflation outpacing nominal earnings. “The nominal rise in income was outpaced by inflation, causing real incomes to fall, according to the survey.”

Iqbal was quoted by The Express Tribune as saying, “The journey to economic progress was first disrupted in 2018 and then again in 2022 consumption led economic growth caused the economy to crash in the following year.” He added that cash transfers under the Benazir Income Support Programme “are not the solution,” stressing the need for growth and wealth creation.

Responding to criticism of PML-N policies, he said it would take three years to undo the effects of Pakistan Tehreek-e-Insaf's decisions and ruled out an early exit from the IMF programme, while expressing hope that sustained employment growth and income recovery would reduce poverty.