World Bank Reports Pakistan’s Rising Poverty Amid Economic Challenges

ISLAMABAD: The World Bank projects Pakistan’s economic growth at 3.8% for the current fiscal year, highlighting that the country is home to nearly half of the extremely poor population in the Middle East, North Africa, and Afghanistan-Pakistan (Menaap) region.

In its latest Economic Outlook, released ahead of the IMF-World Bank annual meetings, the Washington-based institution noted that Menaap is the only global region where poverty levels remain above pre-pandemic figures and continue to escalate. Pakistan’s significant share of the region’s extreme poor underscores the urgent need for economic reforms and targeted interventions.

The report warns that a prolonged slowdown in sectors such as tourism and construction could further diminish labor demand, adversely affecting income flows to labor-sending economies like Pakistan. Despite these challenges, the World Bank anticipates a gradual increase in GDP growth from 3.2% in FY25 to 3.8% in FY27, driven by resilience in services, manufacturing, and livestock production.

Looking ahead, the World Bank’s findings will likely influence discussions at the upcoming IMF-World Bank meetings, where policymakers will need to address the rising inflation and external pressures that threaten economic stability. Continued domestic activity is expected to counterbalance the impact of higher commodity and transport costs.