Overview

• The assessment places the national poverty rate at roughly 25–25.3% in 2024–25, reversing a long decline, with post-2018–19 figures nowcasted since the last full HIES round and a new 2024–25 survey awaited.
• The World Bank attributes the setback to overlapping shocks including COVID-19, global inflation after the Ukraine war, devastating 2022 floods and additional flooding in 2025, alongside macroeconomic stress.
• It warns Pakistan’s consumption-led growth model has reached its limits, citing low productivity, more than 85% of jobs in the informal economy, and the exclusion of women and youth from the labor force.
• Human capital and service gaps remain severe, with nearly 40% of children stunted, about one-quarter of primary-aged children out of school, three-quarters of primary students lacking basic reading skills, and widespread shortfalls in safe water and sanitation.
• The report urges investing in people and places, shock-responsive safety nets, fiscal reprioritization including better targeting of subsidies, and stronger data systems, while officials say welfare programs are expanding and subsidy targeting is being improved.