Ringing alarm bells over increasing numbers of poor and unemployed in Pakistan, the country's state bank said the level of poverty rose to 33 per cent from 20 per cent in the last 15 years, even though the economy looked up with a growth rate of 5.1 per cent.

"It is true that the incidence of poverty in the country has risen from almost 20 per cent to 33 per cent," the Pakistan State Bank said in its latest annual report and called for large scale budget allocations in the fields of social, education and health sector as well as adoption of pro-poor policies to create jobs in the shorter run.

The report, however, refrained from blaming the Pervez Musharraf regime for the increase in poverty, stating that the increase happened over 15 years and not because of the policies pursued in the last four years.

"Given the carryover of the past legacy, current geopolitical and security situation, non-supportive external economic environment, and weak institutional capacity, it will simply be a pipedream to expect an accelerated fall in the incidence of poverty in Pakistan in the short term," it said.

Urging the government to make pro-poor policies to reverse the trend, it said, "The biggest challenge facing the economic managers in the short term is to create as many jobs as possible."

The report said the economy appeared to be steady with the GDP growth remaining at 5.1 per cent in the fiscal year 2002-03, mainly due to the improvement of harvests of key crops and increase in exports to a record $11.1 billion.

The country's forex reserves shot up to a record over $11 billion and the current account surplus jumped to an all time high of $4 billion, the foreign remittances also accelerated to a new high of $4.2 billion.

"Despite the impressive improvement in the macroeconomic fundamentals, a strong and secure external sector, increased development spending by the government, upsurge in growth rate, easy monetary policy and quantum jump in private sector credit, the popular perception about the economy amongst the media and commentators does not reflect the improvements," it said.

Suggesting its own roadmap for an accelerated economic growth in future, the report said the policy focus of the government should be shifted to increased government spending on human resource developments and infrastructure to create more jobs.

Putting the entire blame on the previous democratic governments, the report said a study of socio-economic dimensions of poverty suggests that Pakistan's economic performance has been dismal during the 1990s. Not only the income poverty but also the income inequality increased during the period, it said.

On the status of Pakistan's external debt, it said the Paris Club debt restructuring and a $1 billion debt write-off by the United States also catalysed significant improvement in the country's debt profile.

After a spate of debt write-offs and rescheduling loans by different countries after Pakistan's decision to reverse its pro-Taliban policy in Afghanistan, Pakistan foreign debt stood around $37 billion.