The World Bank’s latest Pakistan Development Update has shed light on the country’s ongoing battle with poverty.

Despite efforts, the poverty headcount rate, measured at the lower-middle-income country poverty line of $3.65/day in 2017 purchasing power parity (PPP), is anticipated to hover around 40 per cent from FY24 to FY26.

The report highlights several key factors contributing to this stagnation in poverty reduction. Weak economic growth, stagnant real labor incomes, and persistently high inflation are cited as primary culprits.


Importantly, the continuation of import management measures and potential cuts in public spending on social sectors are expected to exacerbate the situation.

This could disproportionately affect poorer households, already struggling with depleted savings and reduced incomes.

The combination of chronic inflation and policy uncertainty poses additional challenges, potentially leading to social unrest and negative welfare impacts.

To mitigate these risks, increased targeted transfers are identified as crucial to safeguarding the most vulnerable segments of society.

Moreover, the report warns of potential consequences on education and healthcare. The escalating cost of living, coupled with rising transportation expenses, may result in an increase in out-of-school children and delayed medical treatments, particularly among disadvantaged families.

Food security remains a pressing issue, particularly in rural areas affected by natural disasters such as the 2022 floods.

In 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, acute food insecurity is projected to rise from 29 per cent to 32 per cent in the second and third quarters of FY24.

Lastly, the report underscores the persistent challenge of poor air quality and smog during autumn and winter months.

With 71 per cent of the population affected nationwide, these environmental hazards continue to pose significant public health risks.