World Bank Warns of Rising Poverty and Food Insecurity in Pakistan, 10 Million at Risk in FY25

April 24, 2025 — Islamabad — The World Bank has issued a stark warning for Pakistan, forecasting that approximately 10 million people could face severe food insecurity during the fiscal year 2024–25, largely due to economic mismanagement and climate-related agricultural disruptions. The bank has also revised Pakistan’s GDP growth forecast down to 2.7%, citing tight monetary and fiscal policies as contributing factors.

Climate and Economic Pressures Push Millions Toward Hunger

According to the World Bank’s Pakistan Development Update, released on Wednesday, extreme weather events have severely affected key crop yields such as rice and maize. This has heightened food insecurity in rural areas, where the majority of the affected population resides. The report warns that the agricultural shortfall, combined with stagnant wages and inflation, is pushing millions to the brink of poverty.

The report underscores the vulnerability of Pakistan’s food system in the face of climate shocks, with projections suggesting that an additional 1.9 million people may fall below the poverty line this year. Pakistan’s annual population growth rate of around 2% further complicates the situation, expanding the base of those needing urgent support.

Poverty Deepens as Social Safety Nets Fall Behind Inflation

The World Bank highlighted that Pakistan’s spending on social safety programs has not kept pace with inflation, leaving the poor with diminished access to essential services such as food, healthcare, and education. The report points out that despite widespread needs, social protection budgets remain inadequate to counter the soaring cost of living.

The situation is compounded by fiscal strain, with the bank suggesting that Pakistan may miss its annual budget deficit targets. The country’s debt burden is also projected to rise, both in absolute terms and as a percentage of GDP.

Policy Reforms Urgently Needed

To avert a deeper crisis, the World Bank has recommended that Pakistan:

• Restore a fully market-determined exchange rate

• Strengthen the interbank foreign exchange market

• Increase transparency in fiscal operations

• Reassess public expenditure priorities, especially toward social safety and food security

The warning from the World Bank adds to growing concerns over Pakistan’s economic fragility, especially amid an already turbulent socio-political climate. Unless bold policy reforms are implemented, the country faces a worsening humanitarian crisis with long-term socio-economic implications.