Pakistan loses $31.5 billion annually due to youth skills gap as graduate unemployment rises

Profit reported that World Bank estimates put Pakistan's yearly loss from workforce skills gaps at $31.5 billion, measured in lost output and foregone exports. Only 7% of young people take part in structured technical and vocational courses, against 22% on average across the region. The figures were highlighted in a case study presented at the World Economic Forum's Global Future Leaders meeting in Dubai.

The study links the gap to weak career guidance, thin mentorship and poor ties between universities and employers. Close to one in three Pakistanis between 15 and 29 sits outside education, employment and training, a share above half among young women. Graduates face an 18.3% jobless rate, compared with 14.7% across all education levels.

Gallup Pakistan, examining the Labour Force Survey 2024-25, puts joblessness among 20 to 24 year old graduates at 32.8%. In technology, P@SHA member firms took on 13,350 fresh graduates in 2024 from a pool of about 72,952, an absorption rate of 18.3%. The study expects the challenge to intensify as artificial intelligence reshapes entry-level roles.