Pakistan, once economically ahead of both India and Bangladesh in terms of per capita income, is now facing toughest economic times, with soaring debt, rising poverty and a worsening social crisis raising concerns about the future of 250 million people.
Economic figures show that Pakistan’s external debt reached around $138 billion in FY2024, while the federal government has earmarked nearly Rs8 trillion in the current budget solely for debt servicing, leaving limited fiscal space for development, education and healthcare.
The country’s debt burden expanded sharply in recent years. Pakistan’s total public debt, which stood at around Rs44 trillion during the change of government through the no-confidence vote in 2022, has now climbed beyond Rs68 trillion, intensifying political debate over economic management.
According to economic indicators, an average Indian citizen’s GDP per capita is around $2,700, compared to approximately $1,600 for a Pakistani citizen. This means an average Indian is now about $1,100 richer per year by this measure, roughly 70% higher in per-capita income compared with Pakistan.
The shift highlights a major change in South Asia’s economic landscape. While India’s economy has expanded rapidly through technology, manufacturing, exports and foreign investment, Pakistan has struggled with debt pressures, inflation, economic instability and slower growth. The figures show how dramatically regional economic race has changed, raising questions over why Pakistan, which once had a stronger position in the region, has fallen behind in key economic indicators.
The widening economic gap between Pakistan and India has become increasingly evident. While India has emerged as one of the world’s fastest-growing major economies with rising foreign investment and expanding exports, Pakistan continues to grapple with repeated IMF programmes, high inflation, heavy borrowing and slow economic growth.
The impact is being felt across Pakistani households. According to official economic estimates, nearly 39% of the population lives below the poverty line, while consumption of essential food items such as wheat and rice continues to decline, reflecting growing financial hardship.
Child malnutrition has also reached alarming levels, with around 39% of Pakistani children suffering from stunted physical and mental growth, threatening the country’s future workforce and productivity.
Education and healthcare indicators paint an equally troubling picture. University enrolments have declined as more families struggle to afford higher education, while reports indicate that over 7,500 children contracted HIV due to contaminated syringes.
Pakistan also continues to face one of the world’s highest newborn mortality rates. Around 555 newborns and 27 mothers reportedly die every day, while millions continue to live with hepatitis, making Pakistan one of the countries carrying the world’s heaviest disease burden.
Despite these challenges, criticism has grown over government spending priorities. Questions have been raised over allocations for official residences, VIP aircraft and luxury government vehicles at a time when millions of Pakistanis continue to struggle with rising food prices and shrinking incomes.
