Pakistan’s poverty rate rose to 28.9 percent in 2024-25, reversing earlier progress in poverty reduction, Planning Minister Ahsan Iqbal has acknowledged, as the government considers revising its poverty measurement system to account for climate shocks, demographic pressure and barriers to opportunity.
The Ministry of Planning and the Oxford Poverty and Human Development Initiative (OPHI) have discussed updating Pakistan’s Multidimensional Poverty Index (MPI), which currently measures deprivation through health, education and living standards.
Government officials said that OPHI proposed adding demographic pressure, climate shocks and emerging barriers to opportunity to the existing indicators. The proposed revision will also examine challenges including insecurity, youth deprivation, gender inequality, digital exclusion, early childhood development, nutrition, stunting and migration.
Speaking at an event to sign a Memorandum of Understanding (MoU) with OPHI, Iqbal said that political instability, policy discontinuity, economic crises and climate shocks had reversed development gains.
The minister called for restoring social investment, empowering local governments and using poverty data to guide national development priorities. He also stressed the need for political stability, sustained economic growth and continuity in development policies to restore progress in poverty reduction.
The updated national poverty measurement exercise will draw on the ongoing Pakistan Social and Living Standards Measurement Survey 2026-27. Iqbal said that any new indicators and complementary thematic studies must rely on reliable data and sound methodology to maintain the credibility and policy relevance of the national measure.
The renewed collaboration will also explore multidimensional poverty analysis at National Assembly and Provincial Assembly constituency levels using data from the 2023 Population and Housing Census.
Officials stated that the Pakistan Bureau of Statistics had already developed constituency-wise poverty analysis, but the government had not decided whether to release the findings publicly because of their far-reaching implications.
Iqbal also stated that the analysis should initially take the form of a pilot project and provide evidence for targeted public investment to improve people’s wellbeing rather than serve as a scorecard for elected representatives.
The proposed collaboration also includes updating the National MPI, examining the relationship between monetary and multidimensional poverty through household survey data, strengthening institutional technical capacity and improving the use of poverty evidence in development planning, resource allocation and social protection.
Iqbal added that Pakistan’s progress in reducing poverty had suffered a setback after 2018 as political instability, interruptions in development policies, economic crises, the Covid-19 pandemic and devastating floods undermined earlier gains and restricted investment in people.
National monetary poverty declined from 29.5 percent in 2013-14 to 24.3 percent in 2015-16 and further to 21.9 percent in 2018-19. However, the latest official estimates show that the rate climbed to 28.9 percent in 2024-25.
Pakistan’s economic growth has also remained low. Growth fell to two percent in the April-June quarter of this year, below the population growth rate of 2.6 percent adding to concerns over poverty and unemployment.
A recent World Bank report stated that one in every two of the poorest people across the Middle East, North Africa, Afghanistan and Pakistan lived in Pakistan.
Iqbal has also urged Prime Minister (PM) Shehbaz Sharif to reconsider the government’s economic policies, describing the current phase of economic stabilisation as “borrowed and stunted”. In his letter, he warned that Pakistan risked stabilising at a structurally low growth rate.
