Pakistan's poverty rate has surged to 28.9 per cent in 2024-25, up from 21.9 per cent in 2018-19, according to the country's Economic Survey 2025-26. The sharp reversal erases a significant portion of the progress made over more than a decade, during which Pakistan had reduced poverty from 50.4 per cent in 2005-06 to a low of 21.9 per cent — a hard-won achievement now largely undone.

Key Developments

The Economic Survey 2025-26 attributes the deterioration to a confluence of severe shocks: record-high inflation, steep currency depreciation, the economic fallout of devastating floods, and the squeeze imposed by stabilisation measures. Together, these forces have compressed household incomes and eroded living standards across income brackets.

The damage is visible in both rural and urban settings. Rural poverty climbed from 28.2 per cent in 2018-19 to 36.2 per cent in 2024-25. Urban poverty rose from 11 per cent to 17.4 per cent over the same period — a near 60 per cent relative increase that underscores how even city dwellers have not been insulated from the crisis.

Regional Disparities

Balochistan has emerged as the worst-affected province, with nearly half its population now living below the poverty line. Poverty levels have also risen significantly in Sindh and Khyber Pakhtunkhwa, while Punjab — Pakistan's most populous and economically dominant province — has recorded a notable increase as well, indicating that the economic shock has been nationwide rather than localised.

The survey warned that widening regional and income disparities risk limiting social mobility and weakening the link between aggregate economic growth and improvements in household welfare — a structural concern that outlasts any single crisis cycle.

Social Indicators Offer a Partial Offset

Despite the worsening poverty numbers, the survey highlighted gains in several social metrics. School attendance and literacy rates have improved, immunisation coverage has expanded, and infant mortality rates have declined. According to the survey, these trends suggest that public investments in education and healthcare continue to yield returns even under conditions of economic stress.

Government Response

To cushion the impact on the most vulnerable, the government has raised the allocation for the Benazir Income Support Programme (BISP) by 17 per cent and expanded its coverage to 12 million families. However, the survey itself cautioned that cash transfers alone are insufficient to address the structural drivers of poverty and inequality — a candid acknowledgement of the limits of the current policy response.

What Comes Next

With economic stabilisation still underway and inflationary pressures only partially eased, a meaningful reversal in the poverty trend is unlikely in the near term. The survey's own data suggests that the burden of adjustment has fallen disproportionately on lower-income households, raising questions about the distributional design of Pakistan's reform programme. Analysts will watch whether the next planning cycle ties growth targets explicitly to poverty-reduction benchmarks.