Pakistan’s poverty rate increased to 28.9 percent in 2024-25 despite improvements in economic growth and macroeconomic stability, according to the Pakistan Economic Survey 2025-26.
The survey shows that nearly three out of every ten Pakistanis are living below the poverty line, reflecting the lasting impact of high inflation, climate-related disasters, economic adjustments, and external shocks over recent years.
Rural areas remain the hardest hit, with poverty estimated at 36.2 percent compared to 17.4 percent in urban centers, highlighting a widening gap in living standards between urban and rural populations.
The report also points to rising income inequality. Pakistan’s Gini coefficient increased from 28.4 to 32.7, indicating that income gains have become increasingly unevenly distributed.
According to the survey, the combined effects of the COVID-19 pandemic, successive floods, rising living costs, and economic stabilization measures have continued to weigh on household incomes, particularly among lower-income groups.
Despite the increase in poverty, several social indicators showed improvement. Literacy rates, school attendance, internet access, sanitation coverage, immunization rates, and access to cleaner energy sources all recorded gains during the year.
To cushion vulnerable households, the government increased social spending. Pro-poor expenditures reached Rs4.66 trillion during July-March FY2025-26, while funding for social protection and disaster relief programs was expanded.
The Benazir Income Support Programme (BISP) remained the country’s largest welfare initiative, receiving an allocation of Rs722.5 billion.
The survey notes that while Pakistan has made progress in stabilizing the economy, reducing poverty and ensuring that economic growth translates into higher living standards remain among the country’s most significant policy challenges.