Table of Contents
Pakistan poverty accounts for nearly half of MENAAP’s extreme poor
Pakistan poverty has emerged as a major concern in the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region, with the World Bank reporting that Pakistan accounts for about 48% of people living below the international poverty threshold of $3 per person per day.
The findings are contained in the World Bank’s latest MENAAP economic update, which examines poverty, employment, economic growth and the impact of regional and global shocks. The bank said poverty in the region remains above pre-pandemic levels, making MENAAP the only World Bank region where poverty has continued to rise in recent years.
Economic shocks push Pakistan poverty higher
According to the World Bank, Pakistan’s poverty rate at the $3-a-day threshold increased by 6.4 percentage points between 2018-19 and 2024-25. Poverty measured against the $4.20-a-day threshold also increased by 3.2 percentage points during the same period.
The deterioration followed a series of economic and climate-related shocks. These included the COVID-19 pandemic, the devastating floods of 2022, high inflation, currency depreciation and a prolonged period of economic adjustment.
The World Bank said these pressures weakened real household incomes and reduced employment opportunities, making it harder for vulnerable households to maintain their purchasing power.
The international poverty line used by the World Bank was revised to $3 per person per day in 2025, based on updated 2021 purchasing-power-parity data. The $4.20 threshold is used for lower-middle-income countries.
Inflation and energy costs add pressure
Rising energy and commodity prices have added another layer of pressure on Pakistani households. The World Bank said petrol prices have increased by around 40% or more in several economies, including Pakistan, Lebanon, Syria and the United Arab Emirates.
Diesel prices have also risen substantially in Pakistan and other economies affected by regional disruptions. Higher fuel costs can feed into transportation, food and production expenses, putting additional pressure on household budgets.
As an oil-importing economy, Pakistan remains particularly exposed to fluctuations in international energy prices. The World Bank noted that higher oil and commodity prices can increase inflation, reduce fiscal space and raise financing pressures.
The bank also identified remittances as an important transmission channel. A prolonged slowdown in tourism, construction and related services in Gulf economies could weaken demand for migrant workers and affect income flows to countries such as Pakistan.
Regional poverty remains above pre-pandemic levels
The World Bank estimates that 14.3% of the MENAAP region’s population lived below the $3-a-day poverty line in 2024, compared with 10.4% globally. At the $4.20 threshold, the regional poverty rate stood at 26.9%, compared with 18.9% worldwide.
Pakistan accounts for approximately 48% of the region’s population living below the $3 threshold. Afghanistan, Syria and Yemen collectively account for another 47%, meaning the four countries together represent the overwhelming majority of the region’s extreme poor.
The World Bank has also noted that MENAAP now accounts for around 14% of the world’s extreme poor, second only to Sub-Saharan Africa.
Pakistan faces wider economic vulnerabilities
Beyond poverty, Pakistan faces continued challenges from inflation, energy costs, climate risks and limited employment opportunities. The World Bank has previously warned that economic growth must become more inclusive and generate better jobs if poverty reduction is to regain momentum.
The bank’s latest assessment also highlights opportunities linked to technology, manufacturing and artificial intelligence. However, converting these opportunities into broad-based improvements in living standards will depend on stronger productivity, employment creation, human-capital investment and resilience against future economic and climate shocks.
The latest findings underline the scale of the challenge facing Pakistan. While economic activity has continued to recover, the World Bank’s poverty estimates show that growth alone has not been sufficient to prevent vulnerable households from facing significant pressure on incomes and living standards.See More on Pulse Paksitan
