The 'Reclaiming Momentum Towards Prosperity: Pakistan's Poverty, Equity and Resilience Assessment' report by the World Bank further disclosed that the aspiring middle class, which constitutes 42.7% of the population, is "struggling to achieve full economic security".

"The aspiring middle class is facing significant non-monetary deprivations, such as limited access to safe sanitation, clean drinking water, affordable energy and housing," the World Bank said, adding that this points to "poor public service delivery in Pakistan".

A troubling fact is that 37% of Pakistan youth, aged between 15 to 24 years, are not employed or participating in education or training because of high demographic pressures and misalignment of labour demand.

"Pakistan's growth model that supported initial poverty reduction has proven insufficient to sustain progress and poverty is on the rise since 2021-22," stated the report released here by the World Bank team.

To a question about the responsibility of the World Bank and the International Monetary Fund (IMF) regarding supporting such a poor economic growth model, Tobias Haque, senior World Bank economist, said that there has not been a single economic growth model being followed by Pakistan, which is imposed either by the World Bank or the IMF.

"Pakistan's once promising poverty reduction trajectory has come to a troubling halt, reversing years of hard-fought gains", the report added.

Bolormaa Amgaabazar, the World Bank's country director in Pakistan, said that the Bank wanted to study why the poverty rate did not fall as quickly as it was the case in the past. To a question, she added that the economy was not doing great in recent years.

"Recent compounding shocks have pushed poverty rates back up to a projected 25.3% in fiscal year 2023-24, which is at the highest level in eight years," according to the report. "In just the past three years, the poverty rate has increased by 7%," it added.

The report showed two different figures of poverty in Pakistan. According to the official national poverty line, the poverty rate was 25.3%, still the highest in eight years, but the international poverty line showed that the level of poverty was staggering at 44.7%.

Christina Wieser, the World Bank's poverty expert, said that from 2001 to 2015, the poverty rate reduced on an average by 3% per annum, which slowed down to just 1% annually during 2015-18.

She added that the post 2018 multiple shocks, including deterioration in macroeconomic conditions led to slight increase in poverty in Pakistan.

The report stated that the 2022 floods caused 5.1% increase in poverty and pushed an additional 13 million people below the poverty line. It added that the 2022-23 increase in inflation due to administered increases in energy prices also rapidly reduced the purchasing power and real incomes of the households.

To a question, Christina Wieser, who is also the lead author of the report, said that it was too early to assess the impact of the recent floods but added that "the vulnerability is incredibly high especially in rural areas and in the agriculture sector".

Over the past two decades, Pakistan's economic growth has been low, volatile and consumption driven, with real GDP per capita growing only 2% annually, which is half of the regional average.

Perverse institutional incentives and elite capture limit Pakistan's expansion of its productive capacity and crowd out productive investments to equitably distribute the benefit of economic growth.