Poverty Trend in Pakistan: A Glimpse from Last Two Decades

PIDE Knowledge Brief No. 26:2021
Publication Year : 2021

Poverty reduction is one of the most important sustainable development goals set by the UN in 2015. According to this goal, Pakistan must reduce its poverty level to half by 2030 from 24.3 percent to 12 percent. Pakistan is making hard efforts to achieve this target although the COVID-19 pandemic has made it difficult to achieve this goal due to severe macroeconomic imbalances in the economy. This brief provides the consistent data series of poverty in Pakistan from 1998 to 2019 using the CBN estimation method. If we look at the historical data, it suggests that poverty has declined to some extent in Pakistan at the national as well as provincial level. Sustained economic growth is considered as the important driver of poverty reduction and in Pakistan, there is a need to maintain an economic growth of around 6 percent to 7 percent to alleviate about 30 percent of the population living under poverty. It is evident from the statistics that the early 2000s were a period of high economic growth and this growth translated into low poverty rates. Whereas after 2006 GDP grew at a decreasing rate as compared to preceding years resulting in low poverty decline and subsequently resulting in a greater number of potential poor in the country. Therefore, this knowledge brief aims to discuss different groups of poor people present in the country by categorising these at different poverty levels. This categorisation will help us to get a deep insight into the state of poverty across the country from 1998 to 2019 and will help policymakers to formulate more specific and relevant policies concerning these different poverty groups.