World Bank disputes Pakistan's poverty reduction claims

ISLAMABAD, PAKISTAN: The World Bank has questioned Pakistan's recent claims of poverty reduction, observing that only limited groups within the poor witnessed any marginal improvement while rural populations continued to languish under worsening economic pressures.

The Bank said its models for measuring poverty were meant to provide general trends, not statistically precise data, as reported by The Express Tribune.

Responding to inconsistencies highlighted in two of its reports, the World Bank explained that modest signs of economic recovery during the last fiscal year slightly benefited those working in sectors such as logistics and construction, but that agricultural stagnation and widespread informal employment prevented the rural poor from experiencing similar gains.

The World Bank retained its national poverty estimate at 22.2% for FY25, a marginal improvement from 25.3% a year earlier, and stressed that these numbers were projections, not survey‑based findings. It noted that rural poverty remained more than double that of urban areas, with sharp welfare gaps across provinces, and said such inequalities revealed the fragility of earlier progress and highlighted the urgent need for firm policy direction.

Tobias Haque, the World Bank's lead senior economist, stated that Pakistan's economy had achieved short‑term stability, with GDP growth expected at 3% in FY2025–26, but cautioned that far stronger growth would be required to lift the country's poor out of long‑term poverty.

The Bank further emphasised that Pakistan's current economic model was insufficient to deliver sustainable improvements in living standards, as highlighted by The Express Tribune. It said progress against poverty had stalled after 2015, with setbacks following the Covid19 crisis, the devastating 2022 floods and record inflation.

Nearly 40% of children remained stunted, a sign of deep‑rooted deficiencies in human development and public service quality.

The World Bank concluded that forthcoming household surveys would provide updated poverty data, replacing years of rough projections and revealing the country's true socioeconomic reality, as reported by The Express Tribune.

(with inputs from RSS)