Poverty in Pakistan far higher than official data, touches 43.5 pc: Report
New Delhi, April 12 (IANS) Pakistan is facing renewed concerns over rising poverty levels, with fresh estimates by the Social Policy and Development Centre (SPDC) suggesting that the country’s poverty rate has climbed to 43.5 per cent, a report has said.
This figure is significantly higher than the 28.9 per cent estimated by the Pakistan Bureau of Statistics (PBS) based on the Household Integrated Economic Survey 2024-25, as per the Business Recorder report.
The divergence in estimates stems largely from differences in methodology. SPDC relies on a calorific or food energy intake approach, which measures the minimum calorie requirements for basic sustenance and calculates the level of household expenditure needed to meet those needs.
In contrast, PBS uses the cost of basic needs method, updating the poverty line through the Consumer Price Index (CPI) rather than recalculating it using fresh household data.
A similar approach to SPDC has been adopted by the World Bank, which recently estimated Pakistan’s poverty rate at 42.4 per cent for 2025, based on a $3.65 per day threshold adjusted for 2017 purchasing power parity.
The World Bank attributed the increase in poverty since 2020 to overlapping economic crises, rising inflation, and weakened purchasing power.
It also highlighted that a population growth rate of around 2 per cent resulted in approximately 1.9 million additional people falling into poverty in the last fiscal year.
SPDC has raised concerns about the limitations of the CPI-based methodology used by PBS, arguing that the consumption basket primarily reflects the spending patterns of relatively better-off households.
According to the Centre, this approach overlooks regional disparities, particularly in remote areas, and fails to account for essential expenses faced by low-income households, such as informal healthcare and access to clean drinking water.
Concerns over data quality have also been acknowledged by the International Monetary Fund (IMF).
In its December 2024 loan approval documents, the IMF noted significant shortcomings in source data for sectors contributing nearly a third of Pakistan’s GDP, along with issues related to the reliability and granularity of government finance statistics.
As a result, the IMF has extended technical assistance to PBS to develop a new Producer Price Index and to initiate fieldwork for major surveys ahead of the National Accounts rebasing exercise scheduled for completion by June 2026, as per the report.
–IANS
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