Pakistan has made notable progress in reducing poverty over the past two decades, but recent setbacks have slowed this momentum and exposed enduring challenges. According to the World Bank’s Poverty, Equity, and Resilience Assessment, the country reduced its poverty rate from 64.3% in 2001 to 21.9% by 2018. This reduction was largely driven by increased labor incomes as many workers moved from agriculture into sectors such as construction, trade, transport, and manufacturing.
Since 2015, however, these gains have become more fragile. Productivity constraints in non-agricultural sectors have limited further progress. In addition, a series of crises—including the COVID-19 pandemic and catastrophic floods in 2022—have pushed millions back below the poverty line. The World Bank estimates that about 60.4 million people lived below the national poverty line in 2023/24.
Access to economic opportunities remains uneven across Pakistan’s population. “Poverty is about more than income—it is about access to economic opportunities. When people, especially women and young people, can participate fully in the economy, communities thrive,” according to the assessment.
Labor force participation remains low for certain groups: only just over half of working-age Pakistanis were economically active in 2018. Most jobs are informal—over 85%, rising above 95% among poorer households—and offer limited prospects for advancement or higher wages. Women face particular barriers; female labor force participation was just 25.4% in 2020 and most employed women work unpaid or in low-value home-based roles due to social norms and lack of childcare options. Young people also struggle: nearly four out of ten aged between 15 and 24 are not engaged in employment, education or training.
Health and education indicators reveal further obstacles to sustainable development. Nearly two-fifths of children under five suffer from stunting—a condition with long-term impacts on learning ability and earning potential—while high rates of infant mortality persist alongside maternal malnutrition. Education outcomes remain weak: one-quarter of primary school-aged children are out of school; among those who attend school, learning poverty is significant with most ten-year-olds unable to read or write a simple text.
Basic infrastructure gaps compound these issues: while almost all households report some access to water, only half have safely managed drinking water at home and just 17% benefit from piped water supply systems.
Geography also plays a key role in determining opportunity within Pakistan’s borders. There are wide regional disparities: poverty rates range from just over three percent in Islamabad up to nearly seventy-seven percent in Tharparkar district; seven out of ten poorest districts are located within Balochistan province.
Officially classified as predominantly rural—with sixty-one percent living outside cities—the reality revealed by satellite imagery suggests that eighty-eight percent live in areas resembling urban settlements but often without commensurate public services or infrastructure investment.
The World Bank emphasizes that targeted policies focused on regions with untapped potential—as well as investments in human capital such as health care and education—are critical for future progress toward inclusive growth.
“Pakistan stands at a pivotal moment to shape a more inclusive and equitable future,” states the assessment document.“By adopting granular, spatially targeted policies and investing in public services and essential infrastructure, the country can lay the foundation for lasting progress.”
“With thoughtful, inclusive policies,” it continues,“Pakistan can reclaim momentum towards prosperity and build a future where every person has the chance to thrive.”
This analysis forms part of the World Bank Group’s ‘End Poverty Day’ campaign on October 17th.