World Bank Questions Pakistan’s Poverty Reduction Claims, Warns of Deep Rural Inequality and Slow Economic Recovery

Islamabad [Pakistan]: On 31st October, 2025, the World Bank has questioned Pakistan’s recent claims of poverty reduction, observing that only limited groups within the poor have witnessed any marginal improvement, while rural populations continue to languish under worsening economic pressures.

World Bank Clarifies Its Poverty Measurement Models

 The World Bank said that its models for measuring poverty were meant to provide general trends, not statistically precise data, as reported by The Express Tribune.

Economic Recovery Benefits Limited Sectors

 According to The Express Tribune, responding to inconsistencies highlighted in two of its reports, the Bank explained that modest signs of economic recovery during the last fiscal year had slightly benefited those working in sectors like logistics and construction.

 However, agricultural stagnation and widespread informal employment prevented the rural poor from experiencing similar gains.

National Poverty Estimate and Regional Disparities

The Bank retained its national poverty estimate at 22.2% for FY25, a marginal improvement from 25.3% a year earlier, but stressed that these numbers were projections, not survey-based findings.

 It noted that rural poverty remains more than double that of urban areas, with sharp welfare gaps across provinces. “Such inequalities reveal the fragility of earlier progress and highlight the urgent need for firm policy direction.”

World Bank Economist on Growth and Challenges

 Tobias Haque, the World Bank’s Lead Senior Economist, stated that Pakistan’s economy had achieved short-term stability, with GDP growth expected at 3% in FY2025-26.

However, he cautioned that far stronger growth would be required to lift the country’s poor out of long-term poverty.

Structural Issues Hindering Sustainable Progress

The Bank further emphasized that Pakistan’s current economic model is insufficient to deliver sustainable improvements in living standards, as highlighted by The Express Tribune.

Pakistan’s progress against poverty stalled after 2015, with setbacks following the COVID-19 crisis, devastating floods in 2022, and record inflation.

Nearly 40% of children remain stunted, a sign of deep-rooted deficiencies in human development and public service quality.

Need for Updated Poverty Data

The World Bank concluded that forthcoming household surveys would finally provide updated poverty data, replacing years of rough projections and revealing the country’s true socioeconomic reality, as reported by The Express Tribune. 

(INPUTS FROM ANI)