Pakistan’s Poverty Rate Jumps to 29% as Job Creation Fails to Keep Pace

Poverty in Pakistan has risen from 22 percent to 29 percent as job creation struggles to keep pace with the growing workforce, according to the World Bank's latest economic report on the country.

Key points

• As the report notes, labor productivity expansion averaged just 0.4 percent annually between 2014 and 2024.
• Although the country created 17.7 million jobs since 2018, most were concentrated in low-wage and low-productivity sectors, limiting their impact on household incomes and living standards.
• One in every six individuals entering Pakistan's labor market since 2018 has remained without employment, the report stated.
• Pakistan's unemployment rate stood at 7 percent in 2024, with women and young individuals accounting for a disproportionately substantial share of those without jobs.
• The World Bank attributed the seven percentage point growth in poverty partly to severe inflation and sluggish economic expansion.

For context, the report highlights how rising rates and fragile economic and productivity expansion have put pressure on household incomes.

One in every six individuals entering Pakistan's labor market since 2018 has remained without employment, the report stated. Around 3.6 million individuals reach working age in Pakistan each year, adding to the pressure on the economy to create enough jobs. Pakistan's Inflation to Rise Further Next Year. Millions of Jobs Created, but Poverty Still Rises.

For context, the World Bank attributed the seven percentage point growth in poverty partly to severe inflation and sluggish economic expansion. While limited productivity gains have constrained opportunities for workers to earn higher incomes, rising living costs have continued to the challenges facing households. Almost Half of Region's Poorest Residents Live in Pakistan: World Bank. Pakistan's Labor Productivity Remains Subdued.

As the report notes, labor productivity expansion averaged just 0.4 percent annually between 2014 and 2024. The subdued performance points to a persistent challenge: creating jobs that not only absorb new workers but additionally offer better wages and more productive employment.

Meanwhile, the findings highlight the need for Pakistan to accelerate sustainable economic expansion, improve labor productivity and expand access to better quality jobs.

Without stronger employment opportunities and higher earnings, the country will face continued challenges in reducing poverty and improving living standards. Stay Connected with ProPakistani.

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