Pakistan is facing a severe socio-economic crisis as poverty surged to an 11-year high of 29% while income inequality reached its highest level in 27 years, according to the latest official survey released by Planning Minister Ahsan Iqbal. The report indicates that approximately 70 million people in the country now live below the monthly poverty line of Rs 8,484, representing the minimum expenditure required for basic needs.
The preliminary findings for the fiscal year 2024-25 show a 32% increase in poverty compared to 2018-19, when the last survey was conducted. In 2019, the poverty ratio was recorded at 21.9%, rising sharply to 28.9% under the current government, marking the highest level since 2014. Income inequality also worsened, with the Gini ratio climbing to 32.7, surpassing the 1998 peak of 31.1, signaling that wealth and consumption gaps are widening at an alarming pace.
The report attributes the surge in poverty and inequality to multiple factors, including economic stabilization measures under the IMF programme, withdrawal of subsidies, and exchange rate devaluation, all of which have triggered sharp inflation and eroded purchasing power. Natural disasters and low economic growth further exacerbated the situation. This marks the first reversal in the poverty reduction trend in 13 years, disproportionately affecting rural populations. Poverty in rural areas jumped from 28.2% to 36.2%, while urban poverty increased from 11% to 17.4%.
Provincial disparities are also pronounced. Punjab saw poverty rise from 16.5% to 23.3%, Sindh from 24.5% to 32.6%, Khyber-Pakhtunkhwa from 28.7% to 35.3%, and Balochistan recorded the worst conditions, with nearly half the population living in poverty, increasing from 42% to 47%. Security challenges in Khyber-Pakhtunkhwa and Balochistan have disrupted livelihoods, limited access to markets, and intensified household vulnerability.
The survey further highlights a decline in real household incomes. Average monthly income fell from Rs 35,454 in 2019 to Rs 31,127 in 2024-25, a 12% reduction over seven years. Household expenses also decreased from Rs 31,711 to Rs 29,980, reflecting the compression of disposable incomes due to inflation, higher energy prices, exchange rate depreciation, and increased indirect taxation.
Unemployment has reached a 21-year high of 7.1%, while labor market conditions remain weak, with large-scale manufacturing output still below pre-COVID levels. The growth experienced has been largely output-driven rather than employment-intensive, limiting income recovery. The report emphasizes that social protection programs remain insufficient to mitigate the impact on lower-middle and vulnerable groups.
Planning Minister Ahsan Iqbal stressed that cash transfers under the Benazir Income Support Programme alone cannot address the surge in poverty. He highlighted the need for accelerated economic growth, wealth creation, and balanced policies that maintain fiscal stability while promoting sectoral development in agriculture and information technology. Sustainable poverty reduction, he noted, will depend on real income recovery, employment growth, and expanded social protection coverage. The findings present a stark warning about the socio-economic costs of policy missteps and underline the urgent need for targeted interventions to support households, stimulate productive employment, and reduce income disparities across Pakistan.
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