Empirical Evidence of Upsurge in the Poverty Numbers: Pakistan, 2025 Scenario

Electronic, print, and social media, along with international agencies and academia, have all highlighted a considerable increase in Pakistan’s poor population, mostly due to the difficult economic situation and domestic inflation reaching multi-decade highs, especially during the periods 2020-21 and 2023-24. Nevertheless, the estimates suggesting that 45–50% of the population is poor were not based on the latest household-level data.

Recently, the Planning Commission of Pakistan released preliminary estimates of poverty, which suggest that 28.9 percent of the population was living below the poverty line in 2024-25. However, there are drawbacks in the procedure used in estimation of the official poverty level. This research paper highlights inconsistencies in the official methodology and provides estimates of the current poverty level by employing an alternative methodology and using the latest data from the Household Integrated Economic Survey (HIES) 2024-25.

Our estimates show that close to 44 percent of Pakistan’s population (105 million persons) was poor and living below the poverty line during the year 2024-25. The incidence of urban poverty is somewhat lower than rural; however, depth and severity of urban poverty are relatively higher as compared to rural areas. Compared with 2018-19, a 6.9 percentage-point increase in poverty incidence is estimated for 2024-25.

This paper also furnishes estimates of per capita income inequality. Two widely used measures (Gini coefficient and Palma Ratio) of inequality are estimated using income data reported in HIES 2018-19 and 2024-25. The estimates show a substantial rise in both inequality measures.