Pakistan’s unemployment rate is poised to climb to nearly 7 percent, according to the preliminary findings of the Labour Force Survey (LFS) 2024-25, marking a notable rise from the 6.3 percent recorded in the 2021-22 survey. The official release of the latest report is expected next week, but early insights shared during recent technical briefings indicate growing concerns about the state of the country’s labour market and the broader economic climate.
According to senior government sources cited by The News, the Pakistan Bureau of Statistics (PBS) has communicated that the aggregate unemployment rate has inched upward, approaching the 7 percent threshold. This shift reflects the combined effect of slow economic growth, reduced industrial activity, and a persistent mismatch between market needs and workforce skills. Although analysts anticipated a marginal rise in joblessness due to ongoing economic pressures, the new figures highlight a deeper structural challenge.
Background: A Decade of Fluctuating Labour Trends
Pakistan’s labour force has expanded steadily over the past decade as the working-age population continues to rise. The last officially published LFS for 2021-22 reported that the labour force had risen to roughly 71.76 million individuals. At that time, the unemployment rate had observed a slight decline—falling from earlier highs to 6.3 percent—owing partly to post-COVID economic recovery and improved activity in select sectors such as agriculture, construction, and small-scale manufacturing.
However, this progress appears to have slowed or reversed. Economic shocks, high inflation, currency depreciation, pressure from IMF-mandated reforms, and energy shortages have collectively reduced employment opportunities across multiple sectors. Many industries, particularly small and medium enterprises (SMEs), have reported downsizing due to soaring input costs and declining demand.
Preliminary Findings and Emerging Questions
PBS officials presented initial figures from the 2024-25 LFS at the recently held “Data Fest” conference, an event aimed at showcasing advances in data sharing, transparency, and digital statistical reporting. However, experts who attended the session raised objections regarding certain data subsets, particularly those related to the Islamabad Capital Territory (ICT) and a few sectoral categories. According to participants, some numbers appeared inconsistent with ground realities or historical comparison trends, prompting calls for clarification before final publication.
The lack of an immediate response from the Chief Statistician of PBS—despite queries submitted by journalists—has further fueled speculation about the accuracy and interpretation of specific figures. While such discrepancies are not uncommon in preliminary datasets, analysts believe that given the sensitivities around employment figures, PBS must ensure clarity and methodological transparency before issuing the final report.
Employment Challenges Deepening Across Sectors
Economists note that the slowdown in job creation is primarily driven by the manufacturing and services sectors, which collectively account for the bulk of urban employment. Manufacturing output has suffered from reduced exports, import restrictions on raw materials, and inconsistent energy supply—factors that directly impact factory operations and labour demand.
Similarly, the services sector—ranging from retail and hospitality to finance and information technology—has experienced instability. Although the ICT sector has historically shown strong growth, some experts at the Data Fest reportedly questioned newly presented ICT employment statistics, suggesting possible overestimation or misclassification within sub-categories.
Agriculture, which employs the largest share of Pakistan’s workforce, remains relatively resilient but faces its own vulnerabilities, including climate-induced losses, water shortages, and limited mechanisation. Even minor disturbances in agriculture can significantly influence the national unemployment landscape due to the sheer size of the rural labour force.
Youth Unemployment: A Persistent Concern
One of the most troubling dimensions of Pakistan’s labour market remains youth unemployment. With more than 60 percent of the population under the age of 30, the job market is struggling to accommodate a fast-growing pool of young entrants. Many graduates report waiting months or even years to secure stable employment, while employers argue that skill gaps—particularly in digital literacy, technical competencies, and problem-solving—widen the divide between job seekers and available opportunities.
If the overall unemployment rate is nearing 7 percent, analysts believe youth unemployment is likely significantly higher, potentially in double digits. This trend carries long-term implications, including potential brain drain, rising underemployment, and increased financial pressure on households.
Policy Implications and the Road Ahead
The anticipated rise in unemployment places additional pressure on the federal government, which has pledged economic reform, job creation, and investment incentives as part of its development agenda. With the official LFS report scheduled for release next week, policymakers will likely face renewed scrutiny over labour policies, industrial growth strategies, and social protection measures.
Experts argue that without structural reforms—such as improving vocational training, facilitating business-friendly environments, expanding digital economy opportunities, and strengthening agricultural value chains—Pakistan may continue to experience cyclical unemployment spikes.
Moreover, ensuring the accuracy of labour statistics is essential. Reliable data informs government planning, investor confidence, and international assessments from development partners such as the IMF, World Bank, and Asian Development Bank. Any inconsistencies or delays in the LFS release could undermine key policy decisions and hinder progress toward economic stabilization.
Conclusion
The new Labour Force Survey paints a sobering picture of Pakistan’s labour market, with the unemployment rate approaching 7 percent—its highest level in several years. While broader economic pressures are partly to blame, the situation underscores deeper structural issues that require immediate and sustained policy attention. As the government prepares to publish the full report, stakeholders across the economic and social spectrum will be watching closely, hoping for a clearer roadmap to addressing one of the country’s most pressing challenges.
