Pakistan’s poverty rate climbed to 28.8 percent in fiscal year 2025, reflecting a worsening economic situation as the country prepares for the upcoming IMF review mission. This marks a sharp increase from 21.9 percent in 2019, signaling a rise of nearly 7 percent over six years and highlighting growing financial strain on households facing prolonged economic challenges. Multiple factors have contributed to this surge, including persistently high inflation, slow economic growth, and external shocks. The Covid-19 pandemic, fluctuations in global commodity prices, and climate-related disasters such as floods have further exacerbated the situation.
Provincial data shows that poverty has risen significantly in Punjab and Sindh, suggesting the issue is widespread rather than confined to specific regions. The estimates coincide with Pakistan’s ongoing engagement with the International Monetary Fund under multiple stabilization programs, which have involved fiscal tightening and subsidy reforms. While these measures aim to stabilize the macroeconomy, they have increased the cost-of-living pressures for low-income households. Recent policy changes, such as the removal of wheat support prices and adjustments to energy tariffs, have also impacted household incomes.
Analysts note that despite some signs of macroeconomic stabilization, reducing poverty remains a major challenge. The upcoming IMF review is expected to evaluate not only Pakistan’s fiscal performance but also the social effects of economic reforms, as the government works to balance financial stability with public welfare.
