40% of Pakistan’s population slips below poverty line, World Bank warns

Pakistan continues to suffer from a severe economic crisis, as the World Bank has concluded that the country’s present economic model is inadequate for eliminating poverty.

The warning came as over 12.5 million Pakistanis dropped below the poverty level in the previous year alone. It implies that more than 40% of the people in the South Asian country are now poor, unable to satisfy basic requirements such as food, water, and power.

In only one year, the poverty rate in Pakistan climbed from 34% to 39.4%, with 95 million Pakistanis now living on less than $3.65 per day.

Pakistan’s average real per capita growth rate between 2000 and 2020 was only 1.7 percent. It is less than half of South Asia’s average growth rate (4%), according to World Bank data.

“While Pakistan’s per capita income was among the greatest in South Asia in the 1980s, it is currently among the lowest in the area,” the World Bank reported.

The World Bank’s financial chiefs have encouraged Pakistan to make big foreign policy changes in order to bring the country’s struggling economy back on track.

“Pakistan’s economic model is no longer eliminating poverty, and living standards have slipped behind peer nations,” said Tobias Haque, the World Bank’s Pakistan chief country economist.

“This might be Pakistan’s opportunity for a substantial policy shift,” said Najy Benhassine, World Bank country director for Pakistan.

The World Bank has highlighted low human development, an unsustainable fiscal position, an over-regulated private sector, agriculture, and energy sectors as drivers behind Pakistan’s nominal growth.