World Bank expects 40% poverty rate to persist in Pakistan through FY24–26

April 02, 2024 (MLN): Pakistan’s poverty headcount rate, measured at the lower-middle-income country poverty line of $3.65/day 2017 purchasing power parity (PPP), is expected to remain around 40% over FY24–26, according to the World Bank’s latest Pakistan development update.

“Poverty reduction is projected to stall in the medium term due to weak growth, low real labor incomes, and persistently high inflation,” it noted.

The lower-than-potential growth and high inflationary pressures due to continued import management measures, and potential reduction in public spending on social sectors, are expected to worsen human development outcomes.

These effects will be especially compounded for poorer households with already depleted savings and reduced incomes.

Chronic inflation in the absence of substantial growth, along with policy uncertainty, could cause social discontent and have negative welfare impacts.

Furthermore, increased targeted transfers will play a vital role to protect the poorest from these risks.

The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out of school children and delayed medical treatments, particularly for worse off families.

At the same time, food security remains a concern in parts of the country.

 Among 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, many of which were impacted by the 2022 floods, the prevalence of acute food insecurity is projected to increase from 29 to 32%in 2Q–3Q FY24.

Finally, chronic poor air quality and smog during the autumn and winter months remain a public health concern, affecting 71% of the population across the country with wide-ranging impacts on health outcomes.

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