LCCI President warns unemployment, poverty and falling purchasing power are triggering economic crisis

By Commerce Reporter

LAHORE — Faheemur Rehman, President of the Lahore Chamber of Commerce & Industry (LCCI), has called on the federal government to do the needful to reverse Pakistan’s deteriorating economic situation, warning that rising unemployment, deepening poverty, and falling purchasing power are dragging the country into a perilous trap.
Rehman cited the latest data and expert analysis to back his concerns, saying the government must take bold and immediate steps to create jobs, strengthen social protection, and shore up the incomes of ordinary people.
“Too many people are being left high and dry, Rehman said. “We cannot put lip service on economic growth while millions suffer from joblessness and poverty.”

According to the World Bank’s most recent assessment, Pakistan’s national poverty rate has climbed sharply, with about 25.3 per cent of the population living below the national poverty line. In some estimates it has touched even 50 per cent.
If measured by the World Bank’s updated poverty line for lower-middle-income countries — USD 4.20/day — the poverty rate jumps dramatically to 44.7%, meaning nearly half of all Pakistanis would be classified as poor under the new standard.
According to the 2020–21 Labour Force Survey, youth (aged 15–24) unemployment stood at 11.1 per cent, while the broader unemployment rate floated around 6.3%.

The World Bank has blamed weak income growth on a fragile labour market, noting more than 85 per cent of jobs remain informal, and many are low-productivity roles.
The Pakistan Economic Survey also points to limited real income gains, especially in the agriculture, construction and low-end services sectors, where many of the poor are employed.
Some economists have raised red flags over an emerging estimate that unemployment may have surged to 22 per cent by 2023, according to interpretations of the 2023 census data.
Rehman said these numbers are not just smoke and mirrors, they reflect a real human crisis. He argued that unless the government acts fast, the vulnerability of millions will worsen, consumer demand will shrink, and economic growth will stall altogether.
“Unless we generate sustainable jobs and strengthen the economic backbone of the low- and middle-income strata, Pakistan risks sliding into a vicious cycle of poverty and stagnation,” he stated. Rehman emphasized that it’s no longer enough to rely on short-term relief; structural reforms are needed.
He urged the government to boost employment by incentivizing investment in high-job sectors (such as light manufacturing, technology, and skilled services) and by investing in skill development,
1. Expand social safety nets, making them more responsive and far-reaching so that vulnerable families do not collapse under inflationary pressure or economic shocks.
2. Protect real incomes by controlling inflation, stabilizing the currency, and ensuring that productivity gains translate into higher wages.
3. Promote formalization of the labour market so more workers can enter decent, regulated employment.
4. Strengthen local governance and data systems, so investments are better targeted, and reforms are evidence-based.

Rehman pointed out that Pakistan is sitting on a demographic dividend — with a large youth population, but is at risk of squandering that potential. “Every unemployed youth is a lost opportunity,” he warned.
He also noted that declining purchasing power is not only hurting households but also businesses. Consumers without money in their pockets are cutting back on spending, which means local companies are seeing less demand, putting further strain on the economy.
By acting decisively now, Rehman argued, the government can turn the tide and pave the way for more inclusive growth. But failure to do so, he cautioned, could drive even more people into poverty.