Global Economic Crisis and Poverty in Pakistan

Abstract

ABSTRACT: In this case study we adopt a macro-micro framework in order to evaluate the impact of the current global crisis on the Pakistan economy. We use a ‘top-down ’ approach to combine a static computable general equilibrium model with a microsimulation model. Our results suggest that between 2007 and 2009 the poverty headcount ratio is likely to have increased by almost 80 percent, from 22 to 40 percentage points. However, our results also show that this increase is attributable in part to the fuel and food crisis that preceded the financial crisis. Our results also indicate a differential impact, with wage increases for farm workers and a decrease in wages for skilled labour.