The World Bank said that Pakistan’s current economic growth model does not support poverty reduction, causing income gains to stall, with poverty already at an eight-year high in 2024.
The ‘Reclaiming Momentum Towards Prosperity: Pakistan’s Poverty, Equity and Resilience Assessment’ report by the World Bank further disclosed that the aspiring middle class, which constitutes 42.7% of the population, is “struggling to achieve full economic security”.
“The aspiring middle class is facing significant non-monetary deprivations, such as limited access to safe sanitation, clean drinking water, affordable energy and housing,” the World Bank said, adding that this points to “poor public service delivery in Pakistan”.
A troubling fact is that 37% of Pakistan youth, aged between 15 to 24 years, are not employed or participating in education or training because of high demographic pressures and misalignment of labour demand.
“Pakistan’s growth model that supported initial poverty reduction has proven insufficient to sustain progress and poverty is on the rise since 2021-22,” stated the report released here by the World Bank team.
To a question about the responsibility of the World Bank and the International Monetary Fund (IMF) regarding supporting such a poor economic growth model, Tobias Haque, senior World Bank economist, said that there has not been a single economic growth model being followed by Pakistan, which is imposed either by the World Bank or the IMF.
“Pakistan’s once promising poverty reduction trajectory has come to a troubling halt, reversing years of hard-fought gains”, the report added.
“Recent compounding shocks have pushed poverty rates back up to a projected 25.3% in fiscal year 2023-24, which is at the highest level in eight years,” according to the report. “In just the past three years, the poverty rate has increased by 7%,” it added.
The report showed two different figures of poverty in Pakistan. According to the official national poverty line, the poverty rate was 25.3%, still the highest in eight years, but the international poverty line showed that the level of poverty was staggering at 44.7%.
