Extreme poverty surges to 16.5% from 4.9%, but based on older data, experts cautionISLAMABAD – The World Bank has raised the global income thresholds used to measure poverty, resulting in a sharp increase in Pakistan’s reported poverty rate, which now stands at 44.7%. However, analysts warn that the new figures may not fully reflect current realities, as they are based on the 2018-19 Household Income and Expenditure Survey (HIES).On Thursday, the World Bank unveiled its updated international poverty benchmarks to account for changing global prices of goods and services. The new poverty threshold for lower-middle-income countries like Pakistan has been raised from $3.65 to $4.20 per person per day.World Bank Senior Poverty Economist Christina Wieser explained during a media briefing that this adjustment has caused Pakistan’s poverty headcount to rise from 39.8% to 44.7% under the new $4.20-per-day threshold.The threshold for extreme poverty was also revised from $2.15 to $3 per day. As a result, the proportion of Pakistanis living in extreme poverty has jumped from 4.9% to 16.5%.Wieser noted that the significant increase is largely due to a high concentration of people living just above the previous $2.15 level—meaning many now fall under the updated $3 line. About 82% of this increase is attributed to a higher benchmark reflecting global standards, while the remainder is due to domestic price changes between 2017 and 2021.The poverty estimates are based on older data and do not reflect major events such as the COVID-19 pandemic or the devastating 2022 floods. “Anything that happened after 2019, including COVID and the floods, is not captured,” Wieser said. “We are eagerly awaiting updated data from the new household survey.”Despite Pakistan’s recent census, the World Bank used United Nations population estimates and relied on the outdated 2018-19 HIES for both international and national comparisons. Wieser emphasized that while global poverty lines are useful for cross-country comparisons, national poverty lines remain more appropriate for domestic policymaking.According to the government’s last published figures from the same 2018-19 survey, 21.9% of Pakistan’s population lived below the national poverty line—a figure not directly comparable with international estimates due to differing methodologies.Outgoing World Bank Country Director Najy Benhassine said the revisions “place Pakistan’s poverty in a global context” and highlight the urgency of reducing vulnerability and building resilience.The forthcoming World Bank Poverty, Equity, and Resilience Assessment for Pakistan aims to provide updated insights into poverty trends, inequality, and drivers of deprivation. It will serve as a foundation for policy recommendations aimed at improving well-being and economic security for all Pakistanis.The World Bank reiterated that these revisions do not necessarily signal worsening living conditions, but rather reflect evolving global standards and better data from comparable countries. The international poverty line, measured using purchasing power parities (PPPs), is mainly intended for comparative analysis across countries and not for national policy decisions.Pakistan is among the countries most affected by the shift to the 2021 PPPs, especially in terms of poverty reclassification under the Low-Income International Poverty Line.The revised thresholds reinforce the importance of targeted social support, resilience-building strategies, and timely data to effectively monitor and address poverty in Pakistan.
