The World Bank has expressed serious concern over Pakistan’s economy as the country has failed to reduce poverty despite massive loans injected by the IMF. The current model of growth has failed to improve the conditions of the poor, and the headcount ratio (HCR) has surged to its highest level of 25.3 per cent in the last eight years, which is a 7 per cent increase in HCR since 2023, the World Bank report states.
Instead of concentrating on rural development to reduce poverty, the Pakistan government has been focused more on increasing defence expenditure. The World Bank report titled ‘Reclaiming Momentum Towards Prosperity: Pakistan’s Poverty, Equity and Resilience Assessment’ mentioned that even the country’s aspiring middle class (constituting 42.7 per cent of its population) is struggling to achieve full economic security.
The report pointed out that compounding crises Covid-19, economic instability, devastating floods, and record-high inflation have further exposed systemic weaknesses, leaving many in low-productivity activities and unable to cope with these challenges.
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