The response was split into two sets when the World Bank’s October Middle East, North Africa, Afghanistan and Pakistan (MENAAP) Economic Update reported that about 48% of the people in the region lived below $3.00 a day. Some interpret it as a ranking; Pakistan is the poorest in the region. Some took it as a consequence of the Bank changing the map of its region, such as Khurram Schehzad, adviser to the Ministry of Finance. Both reactions misrepresent the number; it’s good to begin by remembering what it is.
The 48% is Pakistan’s poorest population, and it is the region’s poorest. Pakistan’s own poverty rate at that line is 23.0% in 2024 (World Bank Open Data), and thus it is in the same range as Djibouti, Syria, and Yemen, where the report indicates rates approach or exceed 20%. But why is it that the share is so large? Pakistan has nearly a third of MENAAP’s population of 813 million (World Bank Data Blog December 2025), and its rate is approximately 1.6 times MENAAP’s rate of 14.3%. If you take a population share of about 31% and multiply by 1.6, you arrive at the figure of about 50%. That’s my own back-of-the-envelope calculation, but it comes close to the published 48.
Here, Mr. Schehzad is correct. The Bank has been treating the Middle East and North Africa as a separate region from South Asia since July 2025, and the region’s share will be dependent on who is in the region. The geographical distribution and classification of income remained unchanged in Pakistan. But it’s only half the answer, as the share was not really the interesting one. The trend is.
The report puts the rise in Pakistan’s poverty rate at $3.00 at 6.4 percentage points between 2018/19 and 2024/25. The government’s statistics bear the same message. The Planning Ministry, relying on the same survey data but a national line, reported an increase in poverty from 21.9 to 28.9%, and the Gini coefficient went from 28.4 to 32.7. The lines are different, and the direction isn’t.
So, what is new in the “rising regional poverty” narrative? Part of it is a catch-up in the data. The Bank was forecasting Pakistan’s growth from 2018-19 till March 2026. When HIES 2024-25 entered its database, the region’s 2024 extreme poverty rate was revised from 11.8 to 14.4%, about 21 million more people (World Bank Data Blog, 26 March 2026). The previous projections missed what was occurring with households, as there had been no comparable survey in 6 years.
Everyone’s foot was moved into the water as well. The extreme poverty line went from $2.15 to $3.00 when the Bank adjusted to 2021 prices. While the rate in Pakistan increased from 4.9% to 16.5% on the same data (2018-19, the rate in the World Bank data more than trebled itself, without a rise in anyone’s income (Dawn, June 2025). The remaining 47% of the poor population of the region in Afghanistan, Syria and Yemen is based on modelling, while the number for Pakistan is from a household survey. Therefore, the regional total and Pakistan’s share of the total is not as accurate as it may appear in a single percentage.
Some confusion was added by the coverage. There are a number of outlets where $3 has been exchanged for around Rs840 per day, and which are based on purchasing power. When the increase in poverty was 6.4 percentage points, one agency reported that poverty “jumped by 6.4%,” a relative increase of approximately 39%, in my arithmetic. And the “poorest” headline has no basis in the report.
What caused the rate to go up then? The Bank attributes this to COVID-19, the floods in 2022, the macro poverty pressure from inflation (29.2% in FY23 and 23.4% in FY24), and a long adjustment period, which led to a reduction in real incomes (Macro Poverty Outlook, April 2026). The same report states that inequality is at a 20-year high. My interpretation is that stabilisation was required, and it was households close to the line who paid the price. The increasing Gini is a consequence of that, but I haven’t seen anyone state it like that. The Bank projects growth of 3.8% for FY27, which Dawn and the Express Tribune report as about 2.2% per head. That won’t reverse a seven-point increase in the nation’s poverty rate in the foreseeable future.
The risk is also from the Gulf. The Update anticipates that the GCC economies will experience a decline in output of 4.3% in 2026, while weaker demand for construction and services jobs will limit income flows to economies that send labour, especially to Pakistan. The numbers are currently in favour of remittances, which hit a record high of $41.6 billion in fiscal year 26, and $10.9 billion in the first quarter of fiscal year 27, which is 14% higher (State Bank of Pakistan data, as reported by Gulf News and Arab News). Remittances will follow the Gulf hiring with a lag, so I would not plan on the current remittance flow continuing.
All that follows is quite practical. Pakistan must conduct HIES on a regular basis; otherwise, if deterioration occurs, it will be reflected in the survey results and not in a revision. It should hold the bottom of the distribution as further consolidation takes place, with the losses showing to be concentrated between the $3.00 and $4.20 levels. It should monitor remittances by corridor and outward worker registration and Gulf non-oil PMIs monthly, as it is the first indicator for the poorest households.
The share is 48% due to reclassification. It does not provide any reason for the increase in the rate.
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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.
Dr. Ghulam Mohey-ud-din is an urban economist from Pakistan, currently based in the Middle East. He holds a PhD in economics and writes on urban economic development, macroeconomic policy, and strategic planning.
