Labour market

ILO forecasts Pakistan unemployment up 1.5 million since 2021

New labour market brief highlights how prolonged crises are cumulating in extreme labour market distress.

Press release | Islamabad, Pakistan | 14 September 2023
Glimpse from the people from the world of work in Karachi, Pakistan. © Human Design Studios/ILO
ISLAMABAD (ILO News) – Deflated job growth and rising unemployment could push Pakistan’s progress toward decent work back by decades, according to a new labour market update issued by the International Labour Organization (ILO).

The brief examines the labour market trends in Pakistan and presents estimates of the impacts of the lingering crisis on employment outcomes in the near-term.

According to ILO estimates, in 2023, Pakistan's employment-to-population ratio has fallen well below its pre-crisis trendline at 47.6 per cent while the number of unemployed persons is expected to reach 5.6 million—a surge of 1.5 million since 2021.

The report also highlights that the female unemployment rate, which is historically at least 1.5 times that of male rates, could reach a high of 11.1 per cent.

The increasing labour market challenges reflect the cumulation of Pakistan’s economic distress, following from the shock of the COVID-19 crisis, the 2022 floods and exacerbated by the recent macroeconomic turmoil. Pakistan's recent agreement with the IMF, securing a US$3 billion Stand-By Arrangement (SBA) in July 2023, aims to avert a debt default and shore up investor confidence. However, the SBA and the squeeze on public financing required in its implementation are likely to add further stress to labour market prospects, at least in the short-term.

“Pakistan is facing a multitude of challenges that are taking a heavy toll on its labour market while driving greater informality and out-migration. The ILO, through its Fourth Decent Work Country Programme (DWCP), is dedicated to addressing the plight of workers and struggling enterprises and to finding solutions that will help to increase the security of their livelihoods through these difficult times,” said Geir Tonstol, ILO Country Director for Pakistan.

He further said that ILO would reinforce social dialogue as an instrument for social stability and develop integrated provincial-level inclusive recovery strategies for decent job creation, with a particular focus on women and youth.

The brief highlights a series of possible steps that could support labour market recovery and mitigate a worsening of decent work deficits in Pakistan in the near-term. These include: provincial-level recovery strategies for decent job creation, with a particular focus on women and youth; maintaining government spending on jobs and social protection programmes focusing on the poor and most vulnerable; supporting small and medium-sized enterprises; prioritizing labour-intensive climate adaptation programmes; and reinforcing social dialogue as an instrument for social stability.

For further information please contact:

Muhammad Numan
Communication Officer
ILO Country Office for Pakistan
Mobile: +92 303 5000041