A new World Bank report, titled “Reclaiming Momentum Towards Prosperity: Pakistan’s Poverty, Equity and Resilience Assessment,” is the first comprehensive evaluation of poverty and welfare trends in the country since the early 2000s, according to a press release from the bank today.
The release indicates that Pakistan’s national poverty rate, after a steady decline from 64.3% in 2001-02 to 21.9% in 2018-19, has been on the rise again since 2020. This is primarily due to compounding shocks like COVID-19, inflation, floods, and macroeconomic stress. The report also suggests that the consumption-driven growth model, which once delivered gains, has reached its limit.
The report’s findings are based on 25 years of household survey data, projected estimates, and geospatial analysis, along with other unique administrative data sources. The official poverty estimates from the World Bank were informed by the Household Integrated Economic Survey (HIES). For projections beyond the 2018-19 survey, the bank used microsimulation models and announced that new estimates will be produced once the HIES 2024-25 data becomes available.
The World Bank found that the earlier reduction in poverty was mainly driven by rising income from non-agricultural labor, as more households shifted from farm work to service jobs. However, the report noted that “slow and uneven structural transformation has hindered diversification, job creation, and inclusive growth.” This has resulted in low productivity across sectors, which has constrained income growth. The report also highlights that over 85% of jobs remain informal and that women and youth are “largely excluded” from the labor force.
Other key findings include the fact that nearly 40% of children are stunted, a quarter of primary-school-aged children are not in school, and 75% of those attending primary school have very limited reading comprehension skills. The report also found a significant deficit in public services, with only half of all households having safely managed access to drinking water in 2018, and 31% lacking safe sanitation.
The press release emphasizes that the report “underscores systematic, complex, and persistent spatial disparities in welfare across Pakistan.” Rural poverty remains more than double that of urban poverty, and many districts that were lagging decades ago continue to do so today. Furthermore, unplanned urbanization has resulted in “sterile agglomeration”—crowded settlements with low living standards.
To address these challenges, the World Bank report calls for “sustained and people-centered reforms” to protect vulnerable families, enhance livelihood opportunities, and expand access to basic services. Christina Wieser, a senior economist and one of the lead authors of the report, stressed that “Reforms that expand access to quality services, protect households from shocks, and create better jobs—especially for the bottom 40%—are essential to break cycles of poverty and deliver durable, inclusive growth.”
The report outlines four key pathways to restore progress in poverty reduction:
- Investing in people, places, and public services while strengthening local governance.
- Creating responsive and inclusive safety nets to increase household resilience against shocks.
- Implementing progressive fiscal measures, including improving municipal finance and targeting investment in the poorest areas.
- Investing in timely data systems to support efficient decision-making and track progress.
Bolormaa Amgaabazar, World Bank Country Director for Pakistan, stated, “It will be critical to protect Pakistan’s hard-won poverty gains while accelerating reforms that expand jobs and opportunities—especially for women and young people.” She added that by focusing on these key areas, Pakistan can get poverty reduction back on track.
In January, the World Bank committed to providing $20 billion to Pakistan over a 10-year country partnership framework (CPF) to support its inclusive and sustainable development.
