Most of the world has clawed its way back from the poverty spike caused by the pandemic. One region has not, and a new World Bank report says a single country accounts for much of the problem.
In its latest economic update for the Middle East, North Africa, Afghanistan and Pakistan, a group of countries the bank calls MENAAP, the World Bank says the region is the only one where poverty is still above pre-pandemic levels and still rising. The report came out this week, ahead of next week's annual meetings of the World Bank and the International Monetary Fund.
Where the poor are
According to the report, as quoted by Pakistan's Dawn and Business Recorder newspapers, Pakistan accounts for about 48% of the region's people living on less than $3 a day, the bank's extreme-poverty line. Afghanistan, Syria and Yemen together account for another 47%. The bank says the region as a whole holds 14% of the world's extreme poor, a share topped only by sub-Saharan Africa.
In 2024, 14.3% of the region's population lived below $3 a day, compared with 10.4% worldwide, the report said. Using a $4.20-a-day line, the figures were 26.9% for the region and 18.9% globally.
The bank blames the regional rise mainly on Pakistan. Between 2018-19 and 2024-25, the share of Pakistanis below the $3 line rose 6.4 percentage points. The report points to a string of shocks: COVID-19, the 2022 floods, a currency and inflation crisis and a long stretch of belt-tightening that cut into household incomes and jobs. The bank's separate Pakistan outlook says real wages fell 3.4% after 2018 and that most new jobs were informal, low-paid or self-employed.
The war's economic toll
The report also tallies the cost of the conflict that began in February. The bank says the closure of the Strait of Hormuz turned a regional war into a global energy shock. Unlike past oil shocks, which usually helped oil exporters, this one has hit the Gulf producers hardest. The bank now expects the regional economy to shrink 2.1% in 2026, after growing 3.3% in 2025, with Gulf Cooperation Council economies contracting 4.3%. That forecast assumes the disruptions last through the end of the year without major new escalation.
Oil-importing countries such as Egypt, Jordan, Morocco, Tunisia and Pakistan have held up better so far. The bank expects their combined growth to rise to 4.3% this year. Still, it warns that higher fuel and food prices, falling remittances from Gulf workers and rising borrowing costs are building pressure. It also flags a stronger-than-usual El Niño expected late this year as a risk to food prices, especially for Pakistan, which depends on the monsoon.
What the bank recommends
The report argues that targeted cash transfers usually do more good for the money than broad fuel subsidies and can help governments under heavy debt keep some budget room. Pakistan has rolled out targeted fuel and farm support to soften the blow of higher prices, Business Recorder reported.