Stagnation in Pakistan: Poverty Reduction Efforts Hit a Wall

Pakistan's poverty reduction has stalled due to economic shocks and lack of reforms, with poverty rising from 22% in 2019 to 25% in 2024. Despite past gains from urbanization, recent adversities like COVID-19, global inflation, and natural disasters have hindered progress, leaving many vulnerable just above the poverty line.

The World Bank has highlighted a concerning stagnation in Pakistan's poverty reduction efforts, once hailed for their rapid progress. The nation's poverty rate, which decreased from 64% in 2001 to 22% in 2019 with the aid of urbanization, has crept up to 25% as of 2024.

The institution attributes this regression to significant economic disruptions, including the COVID-19 pandemic, global inflation triggered by the Ukraine conflict, and a series of catastrophic floods. These events have exposed underlying weaknesses in the country's economic infrastructure, such as low productivity in vital sectors, inadequate public services, and insufficient education and training opportunities.

Khurram Schehzad, adviser to the finance minister, acknowledges these setbacks but emphasizes that the government is responding with extended welfare initiatives and job creation investments. Schehzad asserts that a comprehensive reform agenda is key to protecting vulnerable groups and ensuring sustainable poverty reduction.