The World Bank has warned that poverty in Pakistan is rising again after years of steady decline. In a new report, the bank said that national poverty fell from 64.3% in 2001 to 21.9% in 2018. However, since 2020, the trend has reversed due to multiple shocks. These include COVID-19, inflation, floods, and economic pressure.
The report, titled “Reclaiming Momentum Towards Prosperity,” is the first in decades to deeply assess poverty trends in Pakistan. It highlights that Pakistan’s consumption-led growth model, while initially successful, has now reached its limits. The World Bank stresses the need for sustainable and inclusive reforms. These reforms should focus on job creation, social protection, and access to basic services.
Read more: Nearly 45% of Pakistanis now live below poverty line: World bank
One key finding is that poverty reduction over the last 20 years came mostly from non-farm wage growth. Many households left agriculture for low-skilled service jobs. However, slow and uneven structural change limited productivity and income growth. Today, over 85% of jobs remain informal, while women and youth are largely excluded from the workforce.
The report also highlights major challenges in health, education, and public services. Around 40% of children suffer from malnutrition. A quarter of primary school-aged children are not in school. Even among those who attend school, 75% cannot read a simple story by the end of primary level. In 2018, only half of households had access to safe drinking water, and 31% lacked basic sanitation.
Read more: Over 44% Pakistanis now below poverty line under new WB threshold
To address these issues, the report recommends investment in people, places, and opportunities. It calls for stronger local governance, better public services, and targeted support for the poorest families. Social safety nets must be more inclusive. Unnecessary subsidies should be phased out. Lastly, the World Bank urges Pakistan to improve data systems to guide decisions and track progress toward reducing poverty.