AS attention turns to the government’s plans for the coming fiscal year, one set of figures deserves particular scrutiny. According to the Economic Survey 2025-26, poverty rose from 21.9pc in 2018-19 to 28.9pc in 2024-25. The increase comes after more than a decade of progress, during which Pakistan reduced poverty from 50.4pc in 2005-06 to 21.9pc in 2018-19. The reversal suggests that recent economic shocks have left a lasting mark on household welfare. It is not difficult to guess why. Record inflation, currency depreciation, devastating floods and the difficult adjustments associated with economic stabilisation have all taken a toll on household finances. Poverty in rural areas has risen from 28.2pc to 36.2pc, while urban poverty has increased from 11pc to 17.4pc. Nearly half of Balochistan’s population now lives below the poverty line, while conditions have worsened markedly in Sindh and KP. Punjab, too, has recorded a significant increase. This shows how widely the effects of recent economic shocks have been felt. The survey points to another concern. The burden of those pressures has not been shared equally. While many households have struggled with rising prices and stagnant incomes, others have been better placed to absorb the strain. The result is a wider divide between those who are managing and those who are falling behind. Such disparities limit social mobility and weaken the link between economic growth and improved living standards.

The findings are not entirely bleak. School attendance has improved, literacy rates have risen, immunisation coverage has expanded and infant mortality has declined. These gains suggest that public investment in social sectors can still deliver results during difficult periods. The challenge is to ensure that improvements in education, health and access to services are eventually reflected in stronger household incomes and greater economic security. That will require more than social assistance alone. The government’s decision to increase the BISP allocation by 17pc and expand coverage to 12m families should provide some relief to vulnerable households. Yet cash transfers cannot substitute for jobs, affordable housing, quality healthcare and educational opportunity. The rise in poverty should become one of the principal measures by which economic policy is judged. Stabilisation may have prevented a deeper crisis, but its success will ultimately depend on whether it improves the lives of ordinary Pakistanis.

Published in Dawn, June 13th, 2026