World Bank warns Pakistan drives rise in regional extreme poverty

The World Bank’s latest Economic Outlook notes that poverty in the Middle East, North Africa and Afghanistan-Pakistan (Menaap) region has not only failed to fall since the pandemic but is actually increasing, with Pakistan accounting for almost half of the region’s extremely poor. The institution projects GDP growth of about 3.8% for one outlet fiscal year, while fiscal deficits are set to rise. It cautions that a prolonged slowdown in tourism, construction and related services could diminish labour demand, particularly in Pakistan and the Levant.

Higher commodity and transport costs are expected to fuel inflation and strain external balances, though resilient domestic activity may offset some pressures. Food insecurity remains acute in several areas, and a stronger El Niño pattern in late 2026 could further raise food prices, affecting Pakistan directly through shifting monsoon conditions.