Poverty surge

Poverty has yet again surged in Pakistan with fresh estimates placing nearly half the population below the poverty line, exposing a widening gulf between official claims and lived realities. A recent assessment by Social Policy and Development Centre, an independent research organisation, puts poverty at 43.5% – around 27 million citizens below the poverty line – significantly higher than the 28.9% cited by government agencies.

Equally troubling is the shift in where poverty is deepening. Urban centres, once viewed as pathways to economic mobility, are now witnessing a sharper rise in poverty than rural areas. Rising housing costs, higher transport fares, expensive utilities and unaffordable healthcare have made city life increasingly difficult. The causes are neither sudden nor isolated. Persistent inflation has eroded purchasing power, while weak economic growth has limited income opportunities. Political instability has further disrupted policy continuity, and the aftereffects of the pandemic continue to weigh on households. At the same time, income inequality has intensified, with wealth concentrating among a narrow segment of society. The socio-political fallout of rising poverty is already taking shape. Economic hardship weakens public trust in institutions and fuels discontent. A shrinking middle class and an expanding underclass create conditions where governance becomes more reactive than reform-driven. This then ultimately translates into increased polarisation and policy inconsistency.

To address this crisis controlling inflation must remain a central priority, as rising prices disproportionately affect the poorest households. Fiscal reforms should aim to reduce reliance on indirect taxation while improving revenue collection from higher-income groups. Job creation through support for small and medium enterprises and labour-intensive sectors is critical to restoring economic mobility. In the longer term, investment in education and skills development will be key to breaking the cycle of poverty. Strengthening social safety nets and ensuring they reach the most vulnerable can prevent further economic slippage.