Pakistan has nearly half of extremely poor population in Menaap region, says World Bank report

Pakistan accounts for nearly half of the people living in extreme poverty across the Middle East, North Africa and Afghanistan-Pakistan (Menaap) region, the World Bank said on Tuesday, while projecting the country’s economic growth at 3.8 per cent for the current fiscal year.

In its latest Economic Outlook issued ahead of next week’s IMF-World Bank annual meetings, the Washington-based lender said that poverty in Menaap remained above pre-pandemic levels and was still increasing.

“Pakistan accounts for nearly half of the region’s extreme poor,” the bank said. It estimated that Pakistan’s GDP growth would rise from 3.2pc in FY25 to 3.7pc in FY26 and 3.8pc in FY27. Services, manufacturing and livestock production are expected to support growth despite higher import costs.

The World Bank projected a fiscal deficit of 3.5pc of GDP for FY27, compared with 2.6pc in FY26. It put the current account deficit at 0.1pc for FY26 and expected it to widen to 0.8pc in FY27.

The bank said Pakistan was among the countries in the region facing significant food insecurity. It also warned that a stronger-than-usual El Niño weather pattern expected later in 2026 could push food prices higher and put additional pressure on poorer households.

Pakistan is particularly vulnerable to changes in monsoon patterns, according to the report.

The World Bank said around 48pc of people in the Menaap region living below the $3-a-day poverty line were in Pakistan. Afghanistan, Syria and Yemen together accounted for another 47pc. Poverty at the $3-a-day threshold was close to or above 20pc in Djibouti, Pakistan, Syria and Yemen, the report said.

Across Menaap, 14.3pc of the population lived on less than $3 a day in 2024, compared with 10.4pc globally. At the $4.20-a-day threshold, the regional figure was 26.9pc, against 18.9pc worldwide.

The bank attributed much of the rise in poverty to Pakistan, where the poverty rate at the $3-a-day threshold increased by 6.4 percentage points between 2018/19 and 2024/25. At the $4.20 threshold, it rose by 3.2 percentage points over the same period.

The report linked the increase to several shocks, including the Covid-19 pandemic, the 2022 floods, high inflation, currency depreciation and a prolonged economic adjustment that reduced household incomes and employment opportunities.

The World Bank also warned that Pakistan could face further pressure from the ongoing US-Iran conflict. As an oil-importing country, it could be affected by higher energy and commodity prices, increased inflation, reduced fiscal space and weaker remittances from Gulf economies.

Higher borrowing costs and insurance premiums could add to the pressure if the conflict continues, the report said.

The bank said the wider Menaap region could contract by 2.1pc in 2026 under its baseline scenario, assuming disruptions continue until the end of the year without a major escalation. The region grew 3.3pc in 2025.