42% of Pakistanis live in abject poverty, more may become poor if India continues with decision on Indus Waters Treaty

At a time when Pakistan-India tensions reached such a level that the two countries clashed and Islamabad claimed to have shot down French-made Indian fighter jets, more than 45% of its population lived in abject poverty. World Bank in its latest report classified 16.5% of Pakistanis living in extreme poverty. The World Bank’s latest projections indicate that Pakistan’s poverty rate remains as high as 42.4%. An estimated number of 1.9 million additional people fell into poverty in 2024-25. 

What does World Bank Report say?

The World Bank also said in its report that The country’s GDP growth rate of 2.6% is also deemed “insufficient to reduce poverty.” The report says, "With population growing at nearly 2% annually, this translates to 1.9 million additional people falling into poverty this year."

According to the World Bank report, the agriculture sector faces significant challenges in Pakistan in 2025, as weather conditions deteriorated with a 40% reduction in rainfall, alongside pest attacks and shifting production choices. The international agency also expressed apprehension that crop yields are most likely to decline, ranging from 29.6% for cotton to 1.2% for rice, limiting sectoral growth to under 2%. 

Indus Waters Treaty kept in abeyance

The situation may further deteriorate as India has put the Indus Waters Treaty in abeyance. As the water flow to Pakistan’s Punjab has been severely affected, its agriculture yield is most likely to come under further stress.

Expressing its concerns over the consumption-based inequality widening in Pakistan, the World Bank report says, "However, actual inequality is likely higher since surveys typically underrepresent wealthy households. Additionally, external factors such as evolving global trade dynamics, could influence the pace of economic recovery and subsequent progress on poverty reduction." It added, "Food security concerns loom large, with an estimated 10 million people at risk of acute food insecurity in rural areas." 

Poverty rate in India declines

On the other hand, the extreme poverty rate in India has declined sharply to 5.3% over a decade from 27.1% in 2011-12. World Bank has revised upwards its threshold poverty line to $3 per day. According to the World Bank report, India has lifted 171 million people from extreme poverty in the decade between 2011-12 and 2022-23.