Pakistan's Economic Mirage: Inflation Sheds Light on Grim Reality

Despite claims of economic recovery, Pakistan grapples with relentless inflation. While official reports suggest easing, the populace faces soaring costs for essential goods. Currency woes, climate impacts, and insufficient wage hikes exacerbate the crisis, leaving millions in poverty with dwindling purchasing power.

Despite the government's assertions of economic stabilization, the stark reality for millions of Pakistanis has been unsettling. Official statistics hint at inflation easing; however, the actual cost of living continues to surge, straining household budgets nationwide, as corroborated by The Express Tribune.

Authorities cite a drop in headline inflation to about 7.4% as a sign of recovery. Yet, market conditions tell a different tale, with essentials like food, fuel, and utilities remaining financially out of reach for a vast portion of the populace. Persistent currency depreciation, inflated fuel prices, and climate-induced supply issues have compounded inflationary strains, challenging the stability narrative.

The government's announcement of a 10% pay raise for public employees has had minimal positive effects, according to critics. Nearly 40% of Pakistan's populace continues to face severe poverty, with another 40% barely staying above the poverty line. With a per capita income around $4 daily, purchasing power is dwindling, complicating basic survival.

Government employee Muhammad Saleem noted that the modest salary increase hasn't kept pace with rising costs. "Expenses rise relentlessly while incomes stagnate," he stated. Private-sector workers and wage earners remain devoid of financial relief as well. Homemaker Kiran Ejaz underscored these challenges, pointing out that even PKR 1,500 fails to adequately feed a family twice a day.

Economist Dr. Qais Aslam attributed ongoing price pressures to several factors, including fractured supply chains, heightened import costs, frequent climate disruptions, and diminished agricultural yields. He clarified that while inflation may slow, it doesn't equate to price reductions—it simply means prices increase at a slower rate from an elevated baseline, as per The Express Tribune.

Data from 2025 further underscores the crisis, with prices of vegetables, pulses, and fruits experiencing sharp spikes year-on-year, rendering basic food items luxury for many households. Staples like lentils, onions, and tomatoes have soared in price, while fruits grow unattainably expensive for middle-income families, as noted by The Express Tribune and ANI.

(With inputs from agencies.)