Pakistan Leads Regional Poverty Surge Amid Economic Struggles: Report

News Desk

ISLAMABAD: The World Bank projects Pakistan’s economic growth at 3.8% and a fiscal deficit of 3.5% for the current fiscal year, revealing that the country is home to nearly half of the extremely poor population in the Middle East, North Africa, and Afghanistan-Pakistan (Menaap) region.

According to the Washington-based institution’s Economic Outlook, released ahead of the upcoming IMF-World Bank annual meetings, Menaap is the only global region where poverty levels remain above pre-pandemic figures and continue to escalate. Pakistan’s significant share of this extreme poverty highlights the urgent need for economic reforms and targeted interventions.

The report indicates that a prolonged downturn in tourism, construction, and related services could diminish labor demand, adversely affecting income flows to labor-sending economies like Pakistan. This situation poses serious implications for the livelihoods of millions, as rising import costs and inflation threaten to exacerbate existing economic challenges.

Looking ahead, the World Bank forecasts GDP growth to rise from 3.2% in FY25 to 3.7% in FY26 and 3.8% in FY27, driven by resilience in services, manufacturing, and livestock production. However, higher commodity and transport costs are expected to exert pressure on inflation and external balances. Stakeholders are keenly awaiting the outcomes of the IMF-World Bank meetings next week, which may provide further insights into potential economic strategies and support for Pakistan.