Muhammad Ibrahim, Eiman Ghani
PAKISTAN is recording two contrasting poverty trends. Between 2018-19 and 2024-25, consumption poverty, which measures whether a household can afford its basic needs, rose from about 22 percent to nearly 29 percent. Over the same period, multidimensional poverty fell from around 21 percent to 16 percent. The Multidimensional Poverty Index (MPI) looks beyond what households can afford and measures disadvantages in education, health and living conditions. The two trends, therefore, describe different, but related, aspects of how households are faring.
A study by Research and Development Solutions estimates that around 20 percent of the population remained below the consumption poverty line in both periods, accounting for roughly seven in ten of those who were consumption-poor in 2024–25. A further 8.7 percent of the population fell into poverty, while only 2.1 percent moved out. Among those already below the consumption poverty line in 2018–19, about 91 percent remained there six years later.
MPI moved in the opposite direction, with improvements in several measures of health and living conditions. The share of households lacking skilled assistance at childbirth fell from 11.7 percent to 5.5 percent, childhood immunization deprivation declined from 8.9 percent to 6.1 percent and overcrowding fell from 22.6 percent to 18.5 percent. Reliance on solid cooking fuels remained virtually unchanged at around 52 percent, while education remained a major concern: among households still classified as multidimensionally poor in 2024–25, more than 95 percent faced education-related deprivation.
The different directions of the two measures can be understood in the context of the past six years. COVID-19 disrupted employment, particularly informal work, the 2022 floods damaged livelihoods and infrastructure and sharp increases in food and energy prices reduced what household incomes could actually buy. Inflation reached 29.2 percent in 2022–23 and remained at 23.4 percent the following year. At the same time, improvements in services and basic living conditions built up over longer periods did not necessarily disappear when household finances deteriorated. A household may therefore have better access to healthcare, sanitation or electricity than before while finding it increasingly difficult to cover everyday expenses.
These findings point to the need for a two-pronged response. Pakistan must sustain progress in education, health and basic services while addressing the growing difficulty households face in meeting everyday expenses. Social protection programmes should support both families living in long-term poverty and those pushed into poverty by job losses, rising prices or climate shocks. Ultimately, progress will depend not only on improving access to basic services but also on ensuring that households have secure incomes and can afford their basic needs, allowing more people to move out of poverty.
—Both the writers are associated with the Research and Development Solutions, Islamabad.
