Pakistan Faces Rising Economic Pressure As Poverty Jumps To 28.9%, Unemployment Hits 7.1%

Pakistan's poverty rate surged to 28.9% in fiscal year 2026, up from 21.9% the previous year, according to a report by The Friday Times. The economic survey of Pakistan 2025-26 revealed that poverty had worsened across all major regions of the country. Punjab saw an increase to 23.3% from 16.5%, Sindh rose to 32.6% from 24.5%, Khyber Pakhtunkhwa climbed to 35.3% from 28.7%, while Balochistan remained the poorest province at 47%, up from 41.8%.

Unemployment pressures also intensified, with the number of unemployed people increasing to 5.9 million from 4.5 million. The unemployment rate climbed to 7.1% from 6.3%, a 12.69% rise, highlighting continued challenges in generating employment opportunities and boosting household incomes amid broader economic pressures.

The government expanded social welfare spending, allocating Rs 722.9 billion (Pakistan rupee) to the Benazir Income Support Programme (BISP) in fiscal year 2026. Of that amount, Rs 540.27 billion had been released, serving as the largest component of Pakistan's social safety net system. However, sustained poverty reduction will require stronger job creation, investments in education and skills development, improved healthcare access, and broader economic growth beyond direct cash-transfer programmes.

The report emphasized the importance of rural industrialization and small enterprises for sustainable employment and income opportunities, as well as integrating employable and entrepreneurial skills into degree-awarding institutions to better align educational needs with labor market demands.