ISLAMABAD: Pakistan’s poverty rate has risen sharply to 44.7% under newly revised global income thresholds introduced by the World Bank, up from the previous estimate of 39.8%.
However, economists caution that this updated figure may still not reflect current realities, as it is based on outdated 2018–19 Household Income and Expenditure Survey (HIES) data.
The World Bank announced on Thursday that it had updated its international poverty lines to reflect changes in the global cost of living, using 2021 purchasing power parities (PPPs). For lower middle-income countries like Pakistan, the new poverty threshold is now $4.20 per person per day, compared to the earlier $3.65 benchmark.
“Due to the upward revision, the poverty ratio has jumped from 39.8% to 44.7% on the threshold of $4.20 per day,” said Christina Wieser, the World Bank’s Senior Poverty Economist, during a media briefing.
Alongside this adjustment, the extreme poverty line has also been revised from $2.15 to $3 per person per day. This recalibration has pushed the percentage of Pakistanis living in extreme poverty to 16.5%, a dramatic increase from 4.9% under the older standard.
Wieser explained that the spike stems from a large portion of Pakistan’s population earning between the old and new thresholds:
“One of the reasons for such a high jump was that the majority of people were clustered around the $2.15 to $3 per day income level.”
According to the World Bank, approximately 82% of this increase in extreme poverty is attributable to changes in global poverty lines, which now better reflect updated national thresholds in comparator countries. The remaining 18% is explained by domestic price inflation in Pakistan between 2017 and 2021.
