NewKerala.com

Pakistan's Economy Shifts from Growth to Survival as Households Struggle

A new report details how Pakistan's economy has shifted from growth to basic survival, with households now spending nearly two-thirds of their income on food, housing, and utilities. This crushing burden has forced drastic cuts in essential areas like education, which now receives only 2.5% of household expenditure. The situation is described as fragility disguised as coping, with nominal income gains completely eroded by higher prices. The report warns that treating survival as an acceptable norm will lead to far greater long-term costs for the country's future.

Key Points: Pakistan's Economy Becomes Survival-Focused Amid Inflation

  • 63% of spending on food & utilities
  • Education spending halved to 2.5%
  • Incomes outpaced by inflation & spending
  • Report warns of mortgaging future
3 min read

Pakistan's economy shifts from growth to survival amid shrinking purchasing power: Report

Report reveals Pakistani households spend 63% of income on food and utilities, forcing cuts in education and health, signaling a deep economic crisis.

"Food alone now absorbs more than a third of household spending. - The Express Tribune"

Islamabad, Jan 5

With Pakistani households forced to spend nearly two-thirds of their income on food and electricity, the economy has ceased to be about growth and has become one of survival, a report said on Monday.

Citing the Pakistan Bureau of Statistics' latest Household Integrated Economic Survey, it revealed that life in Pakistan has increasingly become a matter of basic survival.

"Food alone now absorbs more than a third of household spending. Another quarter goes into housing, electricity and gas. Together, these basic needs consume 63 per cent of total expenditure. This is the direct result of prolonged inflation and policy choices that have steadily raised the cost of essentials. Incomes have risen on paper. They have not kept pace in reality. While average monthly earnings have increased over the past six years, household spending has risen faster. What families gain in nominal income is eroded by higher prices," Pakistani daily The Express Tribune detailed.

The report noted that the shrinking purchasing power of the Pakistani rupee is reflected in what households can no longer afford.

"Spending on education has dropped to just 2.5 per cent. It is now less than half the cost of housing and utilities. Health and recreation together make up barely a few percentage points. A society that cuts back on learning and well-being is paying for stability today by mortgaging its future," it mentioned.

According to the report, this is not resilience, but fragility disguised as coping.

Highlighting the steps to be taken, it said, "First, stabilising the cost of food and power must become an economic priority, not an afterthought. Second, inflation control must move beyond interest rates. Supply-side failures in food markets need fixing. And third, education and health spending need insulation from economic shocks. Household budgets are under siege."

"If policy continues to treat survival as an acceptable equilibrium, the long-term costs will be far greater than today's fiscal discomfort," the report added.

Last week, a report in Japan-based media outlet Nikkei Asia highlighted that Pakistan stares at several economic challenges in 2026 amid continuing low economic growth, recurring militant attacks and potential disasters related to climate change.

"Pakistan must intensify the pace of its internal reforms, notably to tackle conditions surrounding the bulk of its population. More than 40 per cent of Pakistan's population of roughly 257 million people live in abject poverty. Besides, the country has an alarming level of illiteracy, with just under 40 per cent of the population considered illiterate," the report stressed.

- IANS

Share this article:

Reader Comments

S
Sarah B
While the situation is dire, we must remember this is about human suffering. The report mentions "fragility disguised as coping" – a powerful phrase. When health and recreation become unaffordable luxuries, the social fabric wears thin. I hope for stability and better days for our neighbours. 🙏
R
Rohit P
It's a classic case of policy failure. "Incomes have risen on paper" but purchasing power has collapsed. We've seen similar inflationary pressures here, but thankfully not to this extreme. The focus must be on fixing supply-side issues in food markets, not just raising interest rates.
A
Ananya R
The statistic about 40% illiteracy is heartbreaking. Education is the only ladder out of poverty. If a family is spending 25% on housing/utilities but only 2.5% on education, you know their priorities are forced, not chosen. A grim reminder of why economic stability matters.
M
Michael C
With respect, the article paints a very bleak picture but offers little context on geopolitical factors or debt burdens that contribute to this. While the analysis of household budgets is sharp, the root causes are often more complex. Still, "mortgaging its future" is a dire warning for any nation.
P
Priya S
Basic survival economy... sounds terrifying. Can't imagine budgeting like that. When over half your income goes just to stay fed and have a roof, there's no room for dreams or progress. This should be a case study for our policymakers on the importance of controlling essential commodity prices.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50