Pakistan Home to Nearly Half of MENAAP Region’s Extreme Poor: World Bank

Pakistan accounts for nearly half of all extreme poverty in the Middle East, North Africa, Afghanistan, and Pakistan region, according to an economic update published by the World Bank on October 7, 2026. The Washington-based lender reported that 48 percent of people living below the three-dollar-per-day threshold across the MENAAP region reside in Pakistan, driven by a series of adverse economic shocks and prolonged adjustment policies that have weakened household incomes.

MENAAP Poverty Levels Exceed Global Averages

The World Bank report noted that MENAAP remains the only global region where poverty levels stay above pre-pandemic benchmarks and continue to rise. Across the region, 14.3 percent of the population lived on less than three dollars a day in 2024, compared with a global average of 10.4 percent. At the 4.20-dollar-per-day threshold, regional poverty reached 26.9 percent against a global rate of 18.9 percent. Afghanistan, the Syrian Arab Republic, and the Republic of Yemen account for another 47 percent of the region’s extreme poor alongside Pakistan, meaning four nations comprise roughly 95 percent of the total.

Reporting on the same data, Daily Pakistan noted that the three-dollar-per-day line equates to approximately 840 rupees. The publication added that Pakistan’s poverty rate at that threshold increased by 6.4 percentage points between the 2018-19 and 2024-25 fiscal periods, while the 4.20-dollar threshold rose by 3.2 percentage points.

Pakistan Today highlighted that the worsening poverty figures persist despite a gradual rebound in headline economic metrics. The World Bank attributed Pakistan’s domestic deterioration to multiple disruptions, including the COVID-19 pandemic, the 2022 floods, high inflation, currency depreciation, and prolonged economic adjustments.

World Bank Projects Modest GDP Growth for Pakistan

The World Bank projected Pakistan’s gross domestic product growth at 3.7 percent for the current fiscal year ending in 2026, rising slightly from 3.2 percent in the previous period, with growth estimated at 3.8 percent for fiscal year 2027. Services, manufacturing, and livestock production remain resilient despite rising import costs.

Daily Pakistan cited a lower GDP growth estimate of 2.2 percent for the current fiscal year, pointing to persistent structural challenges within the private sector. Real GDP per capita growth across the country is estimated at 2.1 percent in 2026, edging up to 2.2 percent in 2027. Meanwhile, inflation is estimated at 7.1 percent for 2026 before increasing to 8.2 percent the following year.

Fiscal and current account metrics face widening gaps over the forecast horizon. The World Bank estimated Pakistan’s current account deficit at 0.1 percent for fiscal year 2026, expanding to 0.8 percent in fiscal year 2027. The fiscal deficit is projected to move from 2.6 percent in 2026 to 3.5 percent in 2027.

Regional Conflicts Drive Fuel Prices and Inflation in Pakistan

Regional conflicts, including the ongoing US-Iran confrontation and Persian Gulf tensions, continue to expose oil-importing countries like Pakistan to severe inflationary pressures. Daily Pakistan reported that fuel prices in Pakistan surged significantly since the onset of regional hostilities, with petrol and diesel prices increasing by more than 40 percent. These higher energy and transport expenses have filtered into the wider economy, pushing domestic inflation to around 11 percent by mid-2026.

Lower-income households face acute vulnerability due to elevated food costs. The World Bank identified Pakistan among nations where significant portions of the population experience crisis-level food insecurity. Households in lower income brackets across developing MENAAP economies typically spend between 35 and 50 percent of their total expenditures on food. Additional risks loom as a stronger-than-usual El Niño weather pattern predicted for late 2026 threatens monsoon conditions and agricultural yields.

Oil-importing economies such as Pakistan, Morocco, Tunisia, Djibouti, Egypt, and Jordan also face shrinking fiscal space, declining remittances from Gulf economies, and higher borrowing costs driven by elevated insurance risk premiums. The World Bank stated that Pakistan’s private sector has yet to fully adapt to these emerging structural and economic demands.