The World Bank has revised its income thresholds, revealing a stark picture for many low and middle-income nations, especially Pakistan.
The new poverty benchmark now considers individuals earning less than $4.20 per day as poor, up from the previous $3.65 threshold.
According to the latest findings, nearly 44.7% of Pakistan’s population falls below this updated poverty line, a sharp rise from the earlier 39.8%. This translates to a staggering 107.95 million people in Pakistan now living in poverty. The new measure suggests that anyone earning less than approximately PKR 1,200 per day is now officially classified as poor.
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World Bank highlighted that this shift in methodology is not indicative of a sudden decline in standards of living but is a more gradual calculation reflecting changing economic conditions. The implications, however, are difficult to avoid. Poverty analysis used 2018-19 household data since the Government of Pakistan has not yet come out with the results of the latest national census.
A concerning revelation in the report is the spike in extreme poverty. Under the updated metric — raising the extreme poverty threshold from $2.15 to $3 per day — 16.5% of Pakistan’s population, or roughly 39.8 million people, are now considered extremely poor.
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The outlook looks even bleaker when measured against the standards of upper-middle income. For nations in this group, the poverty line has risen from $6.85 to $8.30 a day. Astonishingly, 88.4% of Pakistanis make less than that, revealing the extent of the nation’s economic plight.
The World Bank report definitively puts Pakistan in the lower-middle income bracket. It identifies a set of factors driving the increase in poverty: economic uncertainty, skyrocketing inflation, and the 2023 floods, which decimated agriculture production and degraded major infrastructure.
