Ayesha Saba

Pakistan’s national poverty rate increased to 28.9% in FY2024-25, marking a reversal from the 21.9% level recorded in 2018-19, according to the Preliminary Report on Poverty Estimation 2024-25 released by the Ministry of Planning, Development and Special Initiatives.

The report indicates that the rise in poverty reflects changes observed during the six-year period between 2018-19 and 2024-25. The poverty headcount ratio, which measures the percentage of the population living below the national poverty line, rose by seven percentage points over this period.

According to the document, the national poverty line for 2024-25 has been updated to Rs8,483 per adult equivalent per month. This revised threshold incorporates changes in consumption patterns and price adjustments. Individuals with monthly consumption below this level are classified as living below the poverty line under the updated methodology.

The report presents both nominal and real consumption trends during the review period. While nominal household incomes rose, real household consumption declined due to sustained inflationary pressures. The data show that the erosion in purchasing power over the years affected welfare outcomes, contributing to the increase in the poverty headcount.

The document notes that inflation peaked at 29% in 2022-23. The cumulative impact of successive years of price increases reduced real incomes despite nominal earnings growth. The report notes that changes in consumption expenditure patterns were factored into the poverty estimation calculations.

In 2018-19, the poverty headcount ratio stood at 21.9%. By 2024-25, the ratio had risen to 28.9%, reflecting the combined effects of macroeconomic developments during the intervening years. The report uses Household Integrated Economic Survey (HIES) data and applies updated price adjustments to determine poverty levels.

The document also outlines that the poverty estimation framework accounts for adult equivalence scales and regional price differences. The updated poverty line of Rs8,483 per month per adult equivalent represents the minimum required consumption expenditure based on the revised basket of goods and services.

According to the report, the upward movement in the poverty ratio corresponds with the period marked by elevated inflation, changes in real consumption levels, and macroeconomic volatility. The estimation covers both urban and rural populations and provides a comprehensive national overview.

The report further states that poverty estimation was conducted using a consistent methodology to enable comparison with previous years. The change from 21.9% to 28.9% reflects the updated assessment under the latest data and price framework.

The Preliminary Report on Poverty Estimation 2024-25 provides detailed statistical tables and methodological notes supporting the findings. The national poverty increase of seven percentage points over the six years is presented as part of the official assessment for FY2024-25.

The findings form part of the government’s periodic review of poverty trends and serve as the latest official benchmark for national poverty measurement.

Credit: INP-WealthPk