Pakistan Now Holds 48% of Its Region's Extreme Poor, World Bank Says

Pakistan now accounts for 48% of the extreme poor across its entire World Bank-defined region, according to an economic update the Bank published this week — a figure that makes it the single largest driver of a poverty increase the Bank describes as unique in the world.

The numbers behind the headline

The report, titled "From Divide to Opportunity: AI, Jobs, and Growth," covers what the World Bank now calls the MENAAP region — the Middle East, North Africa, Afghanistan and Pakistan, a grouping the Bank created by moving Pakistan out of the South Asia region it used to sit in. Within that region, Pakistan holds roughly 48% of everyone living on less than $3 a day, the Bank's extreme-poverty threshold. Afghanistan, Syria and Yemen together account for another 47%, meaning four countries — three of them shaped by war or insurgency — hold nearly all of the region's extreme poor between them.

The underlying trend is what makes Pakistan's share so large. Between 2018-19 and 2024-25, the share of Pakistanis living under the $3-a-day line rose by 6.4 percentage points. At the higher $4.20-a-day line — a threshold more commonly used for lower-middle-income countries — the increase was 3.2 percentage points, and the Bank now puts nearly half of Pakistan's population below that line altogether.

Why the Bank says this happened

The report does not treat the increase as a single event but as the compounding effect of several years of shocks: the Covid-19 pandemic, the catastrophic 2022 floods, and then a macroeconomic crisis defined by double-digit inflation and a sharply weaker rupee. That sequencing lines up with this desk's own reporting on Pakistan's food security, where the FAO found more than 60% of Pakistanis cannot afford a healthy diet — a separate data set pointing at the same underlying erosion of household purchasing power.

Regionally, the Bank says MENAAP is the only part of the world where poverty remains above its pre-pandemic level and is still climbing: 14.3% of the region's population lived under $3 a day in 2024, against a global rate of 10.4%, while 26.9% lived under $4.20 a day against a global rate of 18.9%. Pakistan's deterioration is large enough, on its own, to explain much of that regional gap.

The jobs story the Bank pairs with it

The same report is not entirely bleak on Pakistan. It credits the country with emerging as one of the world's top five suppliers of artificial-intelligence-related digital services, spanning more than 2,700 distinct skill areas — a notable claim for an economy more commonly associated with textiles and remittances than tech exports. That finding sits awkwardly next to Gallup data this desk covered in September showing graduate unemployment running well above the national average, suggesting the AI-services growth the Bank highlights has not yet translated into broad-based job creation for the people most exposed to the poverty increase.

The Bank's growth and inflation forecasts for the current fiscal year — 3.8% GDP growth and 8.2% inflation — sit close to the government's own projections, and close to the numbers at the center of Pakistan's ongoing IMF negotiations, where the Fund and Islamabad are still arguing over whose inflation forecast is right.

Why the reclassification matters

Moving Pakistan out of the South Asia bracket and into a grouping with Afghanistan, Syria and Yemen is itself a signal about how the World Bank now assesses the country's trajectory — less a comparison with India or Bangladesh, and more a comparison with states working through conflict or near-conflict levels of fragility. Whether that reclassification sticks will depend on whether Pakistan's growth and job numbers start moving in a direction the poverty figures haven't yet shown.

Build Better Pakistan's Economy Desk covers Pakistan's economy, from IMF negotiations to the household-level data that shows what those negotiations are actually about.