Nearly Half of Region’s Poorest People Live in Pakistan: World Bank

Pakistan is facing mounting economic pressure from higher fuel rates, rising poverty and debt risks after the closure of the Strait of Hormuz, according to the World Bank.

Key points

• Throughout MENAAP, 14.3 percent of the population lived on less than $3 a day in 2024, compared with 10.4 percent globally.
• The Bank projected Pakistan's GDP expansion at 3.8 percent in 2027, below the government's 4 percent target.
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• The economic strain comes as Pakistan accounts for approximately 48 percent of individuals living below the $3-a-day poverty line throughout the MENAAP region.
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For context, the conflict that began in February 2026 has raised energy costs throughout the Middle East, North Africa, Afghanistan and Pakistan (MENAAP), with Pakistan among the countries experiencing sharp increases in gasoline and diesel costs.

In its latest regional economic update, *From Divide to Opportunity: AI, Jobs, and Expansion*, the World Bank stated gasoline rates had climbed by 40 percent or more in Pakistan, Lebanon, Syria and the United Arab Emirates.

Diesel rates in Pakistan had additionally risen by more than 40 percent. While cost controls and subsidies have cushioned consumers, they have went on to fiscal pressures. Pakistan, along with Algeria, Djibouti, Iraq and Morocco, is facing significant debt or financing challenges. Petrol More Expensive 4th Day in a Row.

Meanwhile, the economic strain comes as Pakistan accounts for approximately 48 percent of individuals living below the $3-a-day poverty line throughout the MENAAP region. The country's poverty rate rose by 6.4 percentage points at the $3-a-day threshold and 3.2 percentage points at the $4.20-a-day threshold between fiscal years 2018-19 and 2024-25. The World Bank attributed the growth to successive shocks, including the COVID-19 pandemic, the 2022 floods, high inflation, currency depreciation and prolonged economic adjustment.

Throughout MENAAP, 14.3 percent of the population lived on less than $3 a day in 2024, compared with 10.4 percent globally. The World Bank remarked adverse poverty trends were anticipated to continue through 2026, with poverty increasingly concentrated in conflict-affected and fragile economies.

Notably, the Bank projected Pakistan's GDP expansion at 3.8 percent in 2027, below the government's 4 percent target. Inflation is projected to rise to 8.2 percent in 2027 from 7.1 percent in 2026. While the current account deficit is forecast to widen to 0.8 percent of GDP and the fiscal deficit to reach 3.5 percent, per capita GDP expansion is projected to edge up to 2.2 percent in 2027 from 2.1 percent in 2026. Traders Will Trap Islamabad and Govt on One Condition.

Pakistan additionally faces risks from weaker economic activity in Gulf Cooperation Council countries. A prolonged slowdown in tourism, construction and related services could reduce demand for foreign workers and weaken remittance flows to labor-sending economies, particularly Pakistan and parts of the Levant. The country is additionally exposed to climate risks, with changing monsoon patterns, heat stress, irregular rainfall, drought and localized flooding threatening agricultural output.

Despite these pressures, the World Bank identified opportunities for Pakistan in artificial intelligence (AI). The country produces an estimated 75, 000 IT graduates annually and recorded $4.6 billion in information and communication technology services exports in fiscal year 2025-26. Its planned $1 billion AI program through 2030 includes shared computing infrastructure, a sovereign multilingual model, 1, 000 AI PhD scholarships and training for one million non-IT professionals.

Nevertheless, the Bank cautioned that Pakistan's AI ambitions could be held back by subdued innovation, gaps in broadband and electricity access, and limited local-language training data. Only 3 percent of firms documented product innovation and 1 percent noted process innovation, compared with averages of 23 percent and 14 percent, respectively, among lower-middle-income peers.

Notably, the report remarked affordable AI applications designed to work on basic mobile devices, low-bandwidth connections and intermittent power could assist expand adoption in sectors such as agriculture, health and education.

While near-term automation threatened less than 10 percent of jobs, the World Bank remarked AI could improve productivity in an estimated 13 to 20 percent of jobs throughout MENAAP. It additionally cautioned that the benefits could be unevenly distributed.

For Pakistan, the report points to the need to address energy and connectivity constraints, strengthen workforce skills and local data resources, and encourage private-sector investment while managing the economic and fiscal effects of higher fuel rates. Stay Connected with ProPakistani.

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Taken together, the developments around nearly Half of Region's Poorest People Live in Pakistan: World Bank point to a situation that is still moving, and the coming days should bring more clarity.