By Commerce Reporter
LAHORE: Pakistan’s poverty rate increased to 28.9 percent in 2024-25 after years of decline, according to the Economic Survey 2025-26, which highlighted growing economic challenges despite improvements in several key social development indicators.
The survey reported that poverty had declined significantly from 50.4 percent in 2005-06 to 21.9 percent in 2018-19 before rising again to 28.9 percent in 2024-25. Rural poverty stood at 36.2 percent, more than double the urban poverty rate of 17.4 percent.
According to the Economic Survey 2025-27, income inequality also widened during the period. The national Gini coefficient increased from 28.4 in 2018-19 to 32.7 in 2024-25, indicating a greater concentration of income among higher-income groups.
Despite the increase in consumption-based poverty, the survey noted improvements in several social indicators between 2018-19 and 2024-25, including school attendance, literacy, internet access, immunization coverage, sanitation and the use of clean fuels.
The Economic Survey 2025-26 stated that pro-poor expenditures reached Rs4.66 trillion during July-March FY2026, compared with Rs4.25 trillion in the corresponding period of the previous fiscal year.
Spending on Social Security and Welfare rose to Rs822.21 billion, while disaster-related expenditures increased sharply to Rs224.92 billion.
The survey said the Benazir Income Support Programme (BISP) was allocated Rs722.49 billion in FY2026, with Rs540.27 billion disbursed during July-March FY2026.
Digital welfare initiatives also expanded, with Social Protection Wallets facilitating payments through the distribution of 7.3 million SIM cards and the sharing of 6.5 million mobile subscriber numbers.
According to the survey, the Pakistan Poverty Alleviation Fund (PPAF) disbursed Rs2.75 billion and provided 101,188 interest-free loans worth Rs5.96 billion. Pakistan Bait-ul-Mal (PBM) distributed Rs6.56 billion, while Zakat releases amounted to Rs11.77 billion.
The Employees’ Old-Age Benefits Institution (EOBI) collected Rs63.15 billion and disbursed Rs54.29 billion in pensions. Meanwhile, the Workers Welfare Fund (WWF) provided marriage grants, death grants, Hajj assistance and scholarships worth Rs6.83 billion.
The survey further noted that microfinance lending reached Rs739.08 billion, serving 7.54 million active borrowers across the country.
The Economic Survey’s findings indicate that while Pakistan has achieved progress in several human development indicators, economic pressures have led to a reversal in poverty reduction gains made over the previous decade.
Rising poverty and inequality could place greater pressure on social safety nets and public welfare programmes, particularly in rural areas where poverty remains substantially higher than in urban centres.
The survey suggests that sustained economic growth, targeted social protection measures and improved employment opportunities will be essential to reducing poverty and narrowing inequality in the years ahead.
The findings reinforce the importance of government welfare initiatives, including Zakat, Pakistan Bait-ul-Mal and microfinance programmes, in supporting vulnerable households amid ongoing economic challenges.
