Poverty in Pakistan has surged to a worrying 25.3%, according to a new World Bank report, which highlights a sharp increase of more than 7% over the past three years.

The report shows that poverty, which stood at 18.3% in fiscal year 2022, rose to 24.8% in 2023 and is projected to climb further to 25.3% in 2025.

From 2001 to 2015, Pakistan had steadily reduced poverty by around 3% annually, while between 2015 and 2018, the rate of decline slowed to just 1% per year.

However, after 2022, the trend reversed and poverty began to rise again.

The World Bank noted that between 2011 and 2021, household incomes increased by 2-3% annually.

It found that reductions in poverty were driven largely by non-agricultural income, which accounted for 57% of the decline, compared with 18% from agricultural earnings.

The report also highlighted structural challenges in the labor market: 95% of Pakistan’s workforce is engaged in the informal sector, while 85% are employed in low-income jobs.

Although official statistics suggest 39% of the population lives in cities, the World Bank estimates that 60-80% of Pakistan’s population now resides in urban areas.