ISLAMABAD: Finance Minister Muhammad Aurangzeb has acknowledged Pakistan’s poverty challenge after a World Bank report said the country accounted for 48 percent of the extreme poor in the lender’s newly defined Middle East, North Africa, Afghanistan and Pakistan region in 2024.
World Bank says poverty has risen within Pakistan
Aurangzeb spoke to Michael Kugelman of the Atlantic Council on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand, on October 16, 2026. He said Pakistan’s recent inclusion in the MENAAP region affected regional poverty comparisons, but added that poverty remained a serious challenge.
The World Bank’s October economic update said Pakistan accounted for 48 percent of people living below the $3-a-day international poverty line in the region in 2024. The bank’s country-level assessment also estimated that Pakistan’s national poverty rate rose from 22 percent in 2018-19 to 29 percent in 2024-25, leaving around 70 million people living in poverty.
The lender attributed the deterioration to economic shocks including the COVID-19 pandemic, devastating floods in 2022, high inflation, currency depreciation and a prolonged period of economic adjustment. It also warned that growth had not created enough productive jobs for Pakistan’s expanding workforce and said declining real wages had reduced household incomes.
Aurangzeb points to cash aid, fuel subsidies and jobs
When asked how the government intended to tackle poverty despite improvements in inflation, foreign exchange reserves and broader macroeconomic stability, Aurangzeb said:
“It starts with acknowledgement,”
He added:
“There are a number of things which are underway at this point in time.”
He said the government was pursuing immediate financial assistance and longer-term measures to generate employment and improve incomes.
Aurangzeb cited an allocation of Rs838 billion ($3 billion) for the Benazir Income Support Program (BISP), Pakistan’s main cash assistance scheme for vulnerable households, and said payments under its Kafaalat program would increase in January. The planned increase had already been announced by the government.
He also pointed to targeted fuel subsidies for motorcycle riders, three-wheeler operators and owners of small cars, saying around 10 million individual users had benefited. He said:
“With an average household of 4-5 are 40-50 million people who have benefited,”
The minister said the government was also working to improve access to financing for small and medium-sized enterprises and affordable housing. But he said cash transfers and targeted subsidies alone could not solve the deeper poverty problem.
He added:
“And growth leads to job creation, and that is going to be ultimately what is going to be the structural solution to this,”
Government seeks growth-led recovery
According to government figures, Pakistan’s economy grew by 3.7 percent in the fiscal year ending June 2026, and Aurangzeb expects growth of around 4 percent in the current fiscal year.
He said the government wants to avoid repeating earlier cycles in which consumption-driven growth increased imports, pressured foreign exchange reserves and eventually forced Pakistan to seek external financial assistance.
Aurangzeb said investment- and export-led growth, along with better education, health care and workforce skills, would be needed to make economic progress sustainable.
