Introduction
Pakistan is facing a severe economic challenge as poverty in Pakistan has reached 29 percent, the highest level in the last 11 years. The latest government survey highlights that 70 million people are living in extreme poverty, earning as little as Rs 8,484 per month. Rising income inequality and unemployment have intensified the situation, creating significant socio-economic concerns.
Rising Poverty and Inequality
According to the official survey released by Federal Minister for Planning and Development Ahsan Iqbal, poverty has increased by 32 percent between 2018-19 and 2024-25. The poverty rate in 2019 was 21.9 percent, which has now surged to 28.9 percent. Wealth inequality has also reached its highest level in 27 years at 32.7 percent, surpassing previous records from 1998.
The labor market reflects these challenges, with unemployment at a 21-year high of 7.1 percent. The stagnation of large-scale industries and low productivity further exacerbate poverty in Pakistan, limiting employment opportunities and hindering economic growth.
Factors Contributing to Poverty
Several factors have contributed to the worsening poverty in Pakistan:
- IMF Program: Withdrawal of subsidies under IMF agreements has increased the cost of living.
- Currency Depreciation: The declining value of the rupee against the dollar has reduced real income.
- Economic Slowdown: Natural disasters, the COVID-19 pandemic, and low economic growth have affected livelihoods.
- Rural-Urban Disparities: Rural poverty increased from 28.2 percent to 36.2 percent, while urban poverty rose from 11 percent to 17.4 percent.
Provincial disparities also reveal alarming trends. In Punjab, poverty rose from 16.5 percent to 23.3 percent; Sindh from 24.5 percent to 32.6 percent; Khyber Pakhtunkhwa from 28.7 percent to 35.3 percent; and Balochistan from 42 percent to 47 percent over the last seven years.
Economic Implications
The survey reports that real monthly income has fallen by 12 percent, from Rs 35,454 in 2019 to Rs 31,127, while monthly expenses decreased from Rs 31,711 to Rs 29,980. Declining wages and wealth inequality hinder economic mobility, deepen social inequality, and reduce the purchasing power of millions of households.
Steps Toward Poverty Alleviation
Federal Minister Ahsan Iqbal emphasized the need for sustainable employment growth, restoration of real incomes, and expansion of social security programs to reduce poverty in Pakistan. Strengthening industrial production, improving productivity, and promoting export-oriented policies are also critical to mitigating poverty and inequality.
The government’s reforms aim to lay the foundation for long-term poverty reduction, but achieving measurable impact will require coordinated efforts across all levels of governance and active participation from private and public sectors.
Conclusion
The rising rate of poverty in Pakistan and growing wealth inequality highlight an urgent need for economic reforms and social support. Without sustainable employment growth, targeted subsidies, and stronger industrial and export strategies, the country risks further socio-economic destabilization. Addressing these challenges remains critical for achieving inclusive economic development and improving the quality of life for millions of Pakistanis.
FAQ
Q1: What is the current poverty rate in Pakistan?
The poverty rate in Pakistan has reached 29 percent, affecting 70 million people.
Q2: Why has poverty increased in recent years?
Factors include IMF programs, currency depreciation, economic slowdown, and natural disasters.
Q3: Which areas are most affected by poverty?
Rural areas and provinces like Balochistan, Sindh, and Khyber Pakhtunkhwa show the highest poverty levels.
Q4: How has wealth inequality changed?
Wealth inequality has reached 32.7 percent, the highest in the last 27 years.
Q5: What measures are needed to reduce poverty?
Sustainable employment growth, industrial development, restoration of real income, and social security expansion are crucial.