Poverty in Pakistan has been recorded by the World Bank at 39.3% using the lower middle-income poverty rate of 3.2 per day for the fiscal year 2020–21. In September 2021, the government stated that 22% percent of its population lives below the national poverty line set at per month.
Independent bodies supported estimates of a considerable fall in the statistic by the 2007-08 fiscal year, when it was estimated that 17.2% of the total population lived below the poverty line. The declining trend in poverty as seen in the country during the 1970s and 1980s was reversed in the 1990s by poor federal policies and rampant corruption. This phenomenon has been referred to as the "poverty bomb". In 2001, the government was assisted by the International Monetary Fund (IMF) in preparing the Interim Poverty Reduction Strategy Paper that suggests guidelines to reduce poverty in the country. According to a report submitted by Ministry of Planning and Development in the National Assembly of Pakistan, about 24.3% Pakistani lived below the poverty line which translates into 55 million people.
As of 2022, Pakistan's Human Development Index (HDI) is 0.544, and ranks 161 out of 192 countries. Pakistan's HDI is one of the lowest in Asia, after Yemen and Afghanistan.
Wealth distribution
Wealth distribution in Pakistan is slightly varied, with the top 10% of the population earning 27.6% and the bottom 10% earning only 4.1% of the income. Pakistan generally has a low Gini coefficient and therefore a decent distribution of income (relatively lower inequality). In 2015, 24.3% Pakistanis lived below Pakistan's definition of poverty. Statistics vary due to the definition of poverty. According to the World Bank, poverty in Pakistan fell from 64.3% in 2001 to 24.3% in 2015. Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) fell from 6.2% in 2013 to 4% in 2015. Pakistan has made substantial progress in reducing poverty giving it the second lowest headcount poverty rate in South Asia.
AidData cites the World Bank and states that overall "Pakistan has done well in converting economic growth into poverty reduction."
According to a World Bank report in 2019, districts varied widely in poverty, with the richest district Abbottabad at a head count ratio of 5.8pc and the poorest district — Washuk District in Balochistan — at 72.5pc.
Spatial distribution of poverty
During the last decade, poverty elimination programs helped many of the poor to participate and rise up. However the Global financial crisis and other factors like the occupation of Afghanistan have impacted Pakistani growth. Poverty in Pakistan has historically been higher in rural areas and lower in the cities. Out of the total 40 million living below the poverty line, thirty million live in rural areas. Poverty rose sharply in the rural areas in the 1990s and the gap in income between urban and rural areas of the country became more significant. This trend has been attributed to a disproportionate impact of economic events in the rural and urban areas. Punjab also has significant gradients in poverty among the different regions of the province.
Despite this, tremendous progress has been made in many areas. The NWFP now boasts several universities including the Ghulam Ishaq Khan University of Science and Technology. Peshawar, a sleep cantonment during British towns, is a modern cosmopolitan city. Much more can be done to invest in the social and economic structures. NWFP remains steeped in tribal culture, though the biggest Pahan city is Soviet invasion of neighboring Afghanistan is intact and according to Western reports supported the Taliban regime. These and other activities have led to a breakdown of law and order in many parts of the region.