Economic Paradox: Pakistan’s Poverty Rate Rises to 28.9% Despite Macroeconomic Stabilization.
Pakistan Economic Survey 2025-26 poverty rate
Pro-poor spending reaches Rs4.7 trillion during July-March FY26 Pakistan’s poverty rate has risen to 28.9% despite improvements in economic indicators and overall macroeconomic stability, highlighting the gap between economic recovery and the financial realities faced by millions of citizens.
“Pakistan’s poverty rate declined over the long term, from 50.4% in 2005-06 to 21.9% in 2018-19, before increasing to 28.9% in 2024-25,” the Economic Survey noted.
According to the Pakistan Economic Survey 2025-26, poverty has increased considerably from the 21.9% level recorded in 2018-19, while income inequality has also widened, raising concerns about how broadly the benefits of economic recovery are being shared.
The findings come as the government highlights several economic achievements, including GDP growth of 3.7%, reduced fiscal deficits, stronger foreign exchange reserves, and improved investor sentiment.
Economic experts say the latest poverty data indicates that the gains from stabilisation have not yet translated into meaningful improvements for a large portion of the population, particularly low-income families and rural communities.
The survey revealed that rural poverty reached 36.2%, more than twice the urban poverty rate of 17.4%, reflecting persistent economic disparities between urban and rural areas.
The government maintains that social protection measures have helped reduce the burden on vulnerable segments of society. Pro-poor expenditures amounted to Rs4.66 trillion during July-March FY26, compared with Rs4.25 trillion during the same period last year.
Despite the increase in poverty levels, the survey highlighted progress across several social development indicators.
Analysts argue that although macroeconomic stability is essential for meaningful poverty reduction will require stronger employment generation, higher productivity, and increased investment across key sectors of the economy.
The Finance Minister acknowledged these challenges, stating that conventional economic indicators alone are no longer sufficient to ensure employment growth. He emphasised the need for a new economic approach, adding, “We need a paradigm shift in the age of AI.”
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