Urban Pakistani Households Face Rising Financial Struggles Amid Economic Distress

A significant 74% of urban Pakistani households are unable to cover monthly expenses, a 14% rise from last year. New studies highlight increased borrowing and essential cutbacks. Government initiatives and international aid aim to address mounting debt burdens.

Amid economic distress, the financial difficulties faced by urban Pakistani households have soared by 14% over the past year. A staggering 74% of the urban population is now unable to meet their monthly expenses with their current income, according to ARY News. This marks a significant increase from May 2023, when 60% of households reported financial struggles, as revealed by the latest study by Pulse Consultant.

Of those struggling to make ends meet, 60% have had to cut back on essential expenses, including groceries, while 40% have borrowed money from acquaintances. Additionally, 10% of the population has taken on part-time jobs to supplement their income, as per the report.

The survey of Pakistan, with a population of roughly 240 million, showed that more than half, 56%, of those just managing to cover their expenses are unable to save any money. These findings are based on a telephonic poll conducted by Pulse Consultant from July to August, involving over 1,110 respondents from the 11 largest cities in Pakistan.

Pakistan continues to face economic challenges, and Pulse Consultant plans to launch a second round of detailed urban-based studies later this month to gauge the impact of inflation on purchasing and consumption habits. This upcoming survey will include a larger sample of over 1,800 respondents across 17 major cities in Pakistan.

Last month, the Shehbaz Sharif-led Pakistan government unveiled a three-year economic plan that aims to increase the share of provinces in the federal budget from 39.4% to 48.7% by 2027. The plan also highlights the country's debt burden, with total debts expected to reach PKR 79,731 billion by the end of the current fiscal year. Local loans are anticipated to increase by approximately PKR 7,671 billion, while foreign loans will rise by PKR 818 billion.

The Pakistani government has claimed it is working to mitigate the debt burden through refinancing and interest rate risk management. Earlier, Pakistan and the International Monetary Fund (IMF) reached a three-year, USD 7 billion aid package deal.

(With inputs from agencies.)