WEALTH inequality and poverty in Pakistan have reached historic highs, with the national poverty rate climbing to roughly 28.9% and income inequality hitting a 27-year peak. Approximately 70 million citizens survive below the poverty line (and the number is rising with each day passing), while real household incomes have plummeted due to persistent inflation, weak economic growth and IMF programs. Data from the World Inequality Report illustrates an alarming concentration of the nation’s resources. According to World Inequality Report 2026, “the top 10% of earners capture 42% of total income, whereas the bottom 50% receive only 19%. Wealth is even more heavily concentrated. The richest 10% hold 59% of total wealth with the top 1% alone controlling 24%.
There are vast regional Imbalances as poverty is not distributed equally; rural areas suffer higher poverty rates (36.2%) and Balochistan faces a staggering 47% poverty rate compared to other regions like Punjab. This widening gulf is further compounded by a lack of access to basic public infrastructure. The reversal of past poverty-reduction efforts is closely tied to an over reliance on indirect taxes (which disproportionately burden the lower class), stagnant or informal wages and underfunded health and education sectors. Overall, income and wealth are highly concentrated in Pakistan with persistent gender disparities and only minor shifts in inequality trends,” the report observed. Interestingly, while Pakistan has been surviving on IMF bailouts, the media in the country is also blaming the IMF for the increase in income inequality”.
Pakistan’s poverty climbed to a staggering 28.9%—the highest in 11 years—and income inequality surged to the steepest level seen in 27 years. The International Monetary Fund links this worsening wealth disparity to systemic “elite capture,” deep-rooted corruption and privileged access to resources that stifle broader economic growth. The International Monetary Fund highlights several key structural dynamics and governance challenges impacting wealth distribution in Pakistan among which “Elite Capture” is at top. The Fund warns that persistent elite control and privileged access to land, subsidized assets and resources trap the broader population in economic stagnation while exacerbating the wealth gap.
Lack of social spending is another major factor behind widening inequality. The IMF has repeatedly urged Pakistan to increase spending on social safety nets, including the Benazir Income Support Programme, to protect vulnerable households from inflation and subsidy reforms. It also identifies corruption, weak governance and elite privilege as key drivers of the rich-poor divide, noting that they distort markets, weaken the rule of law and hinder equitable wealth distribution. The Fund further highlights deep disparities in health and education with young adults from the richest households receiving more than twice the years of schooling as those from the poorest. According to the IMF, reducing inequality and achieving inclusive growth will require comprehensive structural reforms, stronger governance, greater investment in human capital and a shift away from protectionism and preferential concessions.
The Asian Development Bank (ADB) details in its Asian Development Outlook (ADO) series that Pakistan’s rich-poor gap is widening, characterized by stark disparities in income distribution, regressive taxation and unequal access to resources. The wealthiest 20% of the population controls nearly 50% of the national income, while the poorest 20% hold just 7%.The economy shrank as floods, uncertainty and disrupted external support caused public investment to plunge and private investment and industry to contract. Inflation reached a 5-decade high as supply disruption and currency depreciation propelled increases in food and energy prices.
The World Bank’s assessments of Pakistan, such as the Poverty, Equity and Resilience Assessment, highlight severe economic disparities. The richest 10% of Pakistan’s population captures 42% of the national income, while the bottom 50% survive on just 19%. Compounding crises, including the 2022 floods and record inflation, have pushed the national poverty rate to 25.3%. According to World Bank, addressing this stark wealth gap and reversing poverty trajectories requires comprehensive structural reforms. Key recommendations from the bank include Progressive Fiscal Measures which include Phasing out inefficient and wasteful subsidies while reallocating resources to targeted investments for the poorest demograph.
The World Bank also recommends greater investment in human capital by expanding access to health, education and sanitation, particularly in disadvantaged and remote areas. It also calls for stronger social protection systems to shield vulnerable households from climate-related disasters and economic shocks. Pakistan’s poverty reduction has stalled after years of progress. Poverty fell from 64.3% in 2001 to 21.9% in 2018 but is projected to have risen to 25.3% by 2023/24. The gains made over nearly two decades have been undermined by COVID-19, economic instability, devastating floods and record inflation, exposing deep structural weaknesses. Millions remain vulnerable to falling back into poverty, highlighting the urgent need for sustained reforms, inclusive growth policies and greater investment in human development and social resilience.
Bold policy reforms are now essential to address structural imbalances, prevent sliding back into poverty during shocks and tackle the persistent challenges in remote areas. In this context, World Bank’s Poverty, Equity and Resilience Assessment 2024-25 the first since the early 2000s, looks at how poverty has evolved in Pakistan by combining traditional and non-traditional data, offering detailed analysis and strategic direction on the country’s efforts and challenges to reduce poverty and promote equity. This comprehensive assessment aims to provide a roadmap for policymakers and stakeholders to address poverty and inequality challenges in Pakistan which has reached at alarming level.
—The writer is Former Civil Servant and Consultant (ILO) & International Organisation for Migration and author of seven books.
