Rising Inequality Highlights Economic Imbalances in Pakistan

ISLAMABAD: Growing inequality poses a significant challenge to Pakistan’s economic landscape, intertwining issues of poverty and wealth distribution. While poverty signifies deprivation, inequality reflects the uneven distribution of income, wealth, and opportunities among the population.

Recent household data reveals a troubling trend, with the consumption-based Gini coefficient rising from 28.4 in 2018-19 to 32.7 in 2024-25. This metric, however, likely underestimates the true extent of inequality, as surveys often fail to capture the assets and incomes of the wealthiest households, further obscuring the economic divide.

The implications of this disparity are profound, affecting consumption patterns, business production, investment flows, and import levels. In Pakistan, a small elite holds a disproportionate share of purchasing power, leaving a significant portion of the population struggling to fulfill basic needs, thereby exacerbating social tensions and economic instability.

As the government grapples with these challenges, upcoming policy discussions and economic reforms are anticipated to address the widening gap. Stakeholders are urged to prioritize equitable growth strategies that ensure a fairer distribution of resources and opportunities for all citizens.