ISLAMABAD, JUL 8 /DNA/ – Amid the flood of headlines claiming a sharp rise in poverty in Pakistan, the Pakistan Institute of Development Economics (PIDE) has stepped forward to clarify the situation with its latest report, “The Poverty Illusion: When Numbers Distort Reality.” The findings challenge the widely circulated narrative of a nationwide poverty explosion, revealing that the rise in poverty statistics is primarily due to global metric recalibration rather than a sudden economic collapse. In response to sensational poverty headlines,
Dr. Nadeem Javaid, Vice Chancellor of PIDE and Member of the Planning Commission of Pakistan, stated, “Policymaking must be grounded in facts, not fear. These revised figures reflect changes in how poverty is measured globally, not a dramatic decline in the livelihoods of Pakistanis.”
The report, authored by Dr. Nasir Iqbal, PIDE’s Registrar and Associate Professor, critically examines the World Bank’s revised global poverty lines. The new $4.20 per day threshold, which replaced the former $3.20, has led to an increase in poverty statistics from 39.8% to 44.7%. However, Dr. Iqbal points out that more than 80% of this increase is the result of shifting global poverty benchmarks, not a collapse in household conditions. Inflation and other factors account for just 18% of the increase.
Key insights from PIDE’s analysis include the strength of the informal economy, which supports over 60% of Pakistan’s workforce, absorbing economic shocks and offering resilience during crises. Social protection programs such as the Ehsaas Program and the Benazir Income Support Program (BISP) have played significant roles in mitigating poverty. Additionally, remittances from overseas Pakistanis continue to provide vital support, cushioning households and bolstering the economy during times of distress. Even amidst major economic shocks like the COVID-19 pandemic and the 2022 floods, PIDE estimates the poverty rate in 2025 to be between 23% and 25%, with food-based poverty pegged at just 6.2%, signaling consistent, long-term improvement.
In light of these findings, PIDE has proposed a series of actions to address poverty with a data-driven approach. These include reinstating the Household Integrated Economic Survey (HIES) to update data, refining BISP to link cash transfers with measurable outcomes like education, employment, and asset growth, and developing a National Poverty Reduction Strategy integrated with the Sustainable Development Goals (SDGs) to ensure inclusive economic reforms. Additionally, PIDE calls for leveraging the informal economy through the creation of Village Economic Zones (VEZs) to boost rural employment and productivity via local value chains and agri-tech innovations.
VC PIDE emphasized, “This is not a time for panic, but for rational, evidence-based policymaking that can turn perceived crises into opportunities for structural economic reform.”
