ISLAMABAD The Food and Agriculture Organization (FAO) has taken Pakistan off of its list of “hunger hotspots,” which is a good thing. However, according to UN estimates, severe food insecurity will continue to exist in the provinces of Sindh, Khyber Pakhtunkhwa, and Balochistan at a rate of 20–25%.
A recent World Bank Brief on Poverty and Equity states that Pakistan’s food price inflation changed significantly between April and June 2024, relieving pricing pressure on vulnerable, impoverished, and aspirational middle-class households that spend 42–48 percent of their budgets on food.
However, core inflation, which includes transportation, remained high in rural regions, while energy inflation increased by 65 percent. Additional price increases for consumer products and services were caused by higher indirect taxes. Families in the aforementioned categories, which devote 23–28 percent of their budgets to housing, transportation, and energy, were negatively impacted by these.
Primary-to-middle and middle-to-secondary school transition rates increased by two percentage points in 2023, according to the research. However, according to the 2023 population census, more than 35% of Pakistani youngsters were still not enrolled in school at all.
Furthermore, over 70% of the population is still impacted by chronic air pollution, which is still a public health risk. Punjab lost almost 14 school days as a result of haze and poor air quality.
In fiscal year 2024, real agricultural incomes increased by 5%, but real wages declined in other industries that employ the poor, like trade, transportation, and construction. There was no rise in manufacturing activities for the fiscal year 2023. In a similar vein, metrics of job quality, employment, and labor force participation did not increase.
Since real development expenditures fell in fiscal years 2023 and 2024, the fiscal multiplier of public investment and its direct labor income impact have been lessened. Although official external remittances increased by 10% in fiscal year 2024, only 3.2 percent of the poorest households received them, and their real worth was diminished by strong inflation and exchange rate appreciation.
Spending on social transfers associated with the Benazir Income Support Program increased significantly in 2024. During the fiscal years 2023 and 2024, the BISP benefit levels increased by 50% while the overall consumer price inflation rate increased by 61%.
According to the report, sub-national poverty rates vary from 3.9 percent in Islamabad to 71.5 percent in Khuzdar, with rural poverty being 2.5 times higher than urban poverty. In the fiscal year 2024, both individual labor income inequality and consumption-based inequality, as determined by the Gini index, stayed constant at 47.6 and just over 32, respectively.
The level of horizontal disparity did not change. Inequality within the poor, vulnerable, and aspiring middle class, as well as middle class plus social classes, accounted for over 75% of the overall labor income inequality in fiscal years 2023 and 2024.
