Pakistan Economic Crisis: Pakistan’s prolonged economic crisis is increasingly reshaping how households spend their income, with many families now forced to devote most of their earnings simply to survive. A new government survey shows that people are spending nearly two-thirds of their total income on basic essentials such as food, electricity and housing — leaving little room for education, healthcare and long-term well-being. The findings were reported by The Express Tribune, citing the Household Integrated Economic Survey 2024–25.
According to the report, persistent inflation, policy mismanagement and rising living costs have drastically altered domestic financial priorities. While average incomes have technically grown, household expenses are rising even faster — driven by higher utility tariffs, sustained price pressure and the overall cost of living burden.
The survey indicates that Pakistani households now allocate around 63 percent of their total expenditure to just two areas: food and housing-related costs, including electricity and gas. Food alone absorbs about 37 percent of the household budget, while utilities and housing take another 26 percent. This concentration of spending on basic survival reflects the crushing impact of double-digit inflation and declining purchasing power.
One of the most troubling findings is the steep drop in spending on education. Families are now spending only 2.5 percent of their budgets on schooling — far less than what they pay for housing and utilities. Combined spending on education, healthcare and recreation remains stuck at roughly 7 percent, raising serious concerns about future human development indicators and generational progress.
The report also highlights growing dependence on remittances and informal assistance. The share of foreign remittances in household income has climbed to nearly 8 percent, up significantly from less than 5 percent six years ago. Gifts and external aid have also doubled over the same period. In rural areas, where employment opportunities are scarcer, reliance on remittances is even greater — a trend economists view as a sign of a shrinking domestic economy.
Despite the fact that average monthly income has risen from PKR 41,500 to more than PKR 82,000 over the past six years, expenses have surged at an even faster pace. Consumption spending has grown at an average rate of 19 percent per year, outpacing income growth and steadily eroding household purchasing power. At the same time, inequality has widened sharply, with wealthier households earning more than three times the income of the poorest.
Experts warn that if inflationary pressures remain high and economic reform continues to lag, families may be forced to make even deeper sacrifices — choices that could have long-term consequences for education levels, public health, and social mobility. For millions of Pakistanis, the struggle has shifted from improving their quality of life to simply managing day-to-day survival.
(With agency inputs)