Pakistan drives regional rise in poverty levels

Dawn reported that the World Bank projects Pakistan's economic growth at 3.8 per cent and its fiscal deficit at 3.5 per cent for the current fiscal year. In its Economic Outlook, released on Tuesday ahead of next week's IMF-WB annual meetings, the lender said Pakistan holds nearly half of the extremely poor population in the Middle East, North Africa and Afghanistan-Pakistan region. The bank described the region as the only one where poverty stays above pre-pandemic levels and is still rising.

Poverty in Pakistan at the $3.00-per-day line rose by 6.4 percentage points between 2018/19 and 2024/25, while the $4.20 line showed a 3.2 percentage point rise. The World Bank linked this climb to a run of shocks, among them the Covid-19 pandemic, the 2022 floods, high inflation and currency depreciation. Pakistan also makes up around 48 per cent of the region's population living under $3.00 daily.

The report also ties economic losses to the US-Iran conflict and projects the region to contract by 2.1 per cent in 2026, assuming disruptions persist through the end of 2026. It warns that a stronger El Niño pattern could raise food-price pressures, with Pakistan directly exposed through changing monsoon conditions. Pakistan's current account deficit is projected to widen from 0.1 per cent in FY2026 to 0.8 per cent in FY2027.