Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Muhammad Aman Pracha, has expressed concern over the World Bank’s recent report, which indicates that poverty in Pakistan has increased by 7% over the past three years.
Aman Pracha stated that according to the World Bank, poverty in Pakistan reached 25.3% during the fiscal year 2023-24. He added that in recent years, the government has claimed to be making efforts to reduce poverty, and both the government and, particularly, the State Bank of Pakistan have asserted that poverty was declining. However, the World Bank’s report has contradicted these claims.
He explained that over the past three to four years, Pakistan has faced multiple shocks, including floods, COVID-19, inflation, and an economic crisis. Although the government tried to shield the public from these shocks, poverty could not be reduced.
Quoting the World Bank report, Aman Pracha stated that by 2018, Pakistan had managed to reduce its poverty rate from 64.3% to 21.9%, a significant achievement. However, the pace of poverty reduction slowed after 2015, and recent crises have reversed much of the progress.
According to the statistics, in 2021-22, the poverty rate was 18.3%, in 2022-23, it rose to 24.8%, and in 2023-24, it reached 25.3%.
He noted that millions of households in Pakistan remain vulnerable to falling back into poverty with even minor shocks. According to the international poverty line (a daily per capita income of $4.20), 45% of Pakistan’s population was considered poor in 2018, significantly higher than in peer countries such as Malaysia, Indonesia, Türkiye, and Egypt.
He further highlighted that rural poverty (28.2%) is nearly double that of urban poverty (10.9%), with Balochistan being the most affected province, where the poverty rate stands at 42.7%.
Aman Pracha emphasized that climate change is playing a significant role in increasing poverty. Pakistan is among the 10 most climate-vulnerable countries, despite its share of global carbon emissions being less than 1%. He pointed out that the 2022 floods alone reduced national output by 2.2%, with people with low incomes being the most affected.
He concluded by urging the government of Pakistan to preserve the hard-won gains in poverty reduction and implement reforms that expand employment opportunities for both youth and women. He called for investing in people, building resilience to shocks, improving fiscal discipline, and establishing reliable data systems for effective policy-making.
