Pakistan's Hidden Economic Imbalance: 32.7 Gini Coefficient
A small segment of the population holds a large share of purchasing power and assets, while the majority struggles to meet basic needs, with the consumption-based Gini coefficient increasing from 28.4 in 2018-19 to 32.7 in 2024-25
The hidden cause of economic imbalances in Pakistan is attributed to growing inequality, with a small segment of the population holding a disproportionately large share of purchasing power and assets, while the majority struggles to meet basic needs.
The consumption-based Gini coefficient in Pakistan increased from 28.4 in 2018-19 to 32.7 in 2024-25, indicating a widening gap between the rich and the poor. However, this figure may not capture the full extent of inequality in income and wealth, as household surveys tend to underrepresent the assets and incomes of the richest households.
A relatively small segment of the population in Pakistan commands a disproportionately large share of purchasing power and assets, influencing what people consume, what businesses produce, where investment flows, and how much the country imports. The benefits of economic growth in Pakistan have been distributed unevenly, with expanding sectors such as banking, telecommunications, IT, energy, oil, and gas requiring capital, technology, and specialized skills that favor those who already possess financial resources or access to quality education.
The state's failure to provide decent education and healthcare in Pakistan has denied much of the population a fair opportunity to participate in economic activities, resulting in economic disadvantages being passed from one generation to the next. Furthermore, selected businesses in Pakistan are protected from competition through high import duties, subsidies, tax exemptions, and special regulatory concessions, allowing powerful business groups to resist competition and form cartels to influence prices and markets.
The tax system in Pakistan also treats similar incomes from different sources unequally, with salaried individuals facing substantial income taxes while earnings from property, capital gains, and certain commercial activities enjoy relatively favorable treatment.
## Why it matters The growing inequality in Pakistan has serious economic and social implications, as it can lead to reduced economic mobility, decreased economic growth, and increased social unrest. The concentration of wealth and privilege can also lead to a lack of opportunities for the majority of the population, perpetuating poverty and inequality. As the economy continues to grow, it is essential to address the issue of inequality to ensure that the benefits of growth are shared fairly among all segments of the population.
