Aug 11, 2024 05:29 PM IST
The rising cost of living due to inflation spurred by economic conditions like mounting debt has plunged the majority of urban Pakistan households into crisis.
A new study showed that 74% of urban households in Pakistan struggle to meet monthly expenses. This was an increase of 14% compared to last year in the nation with a population of around 250 million people.
Why are Pakistani households struggling financially?
The struggles are caused mainly due to inflation driven by the country’s economic troubles including increasingly mounting debts. Pakistan recently got a three-year, $7 billion aid package from the International Monetary Fund (IMF).
This comes as the government led by Shehbaz Sharif, unveiled a new three-year economic plan to tackle the debts. This included a proposal to increase the provinces’ share in the federal budget from 39.4% to 48.7% by 2027.
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However, the government also projected total debts of the country to reach PKR 79,731 billion by the end of the current fiscal year. The government’s borrowings in the first 11 months of the outgoing fiscal year also surpassed the combined borrowings of the two preceding fiscal years.
The survey conducted by Pulse Consultant between between July and August, included more than 1,110 respondents across the country’s 11 largest cities.
How are Pakistanis coping with their financial struggles?
Pakistanis are coping with their financial struggles by cutting expenses, borrowing, and even taking up extra work.
60% of the households were forced to reduce essential expenses, which includes groceries. 40% resorted to borrowing money from acquaintances, while 10% of the survey’s respondents have ended up taking part-time work for supplementing their income.
Among the 26% who are still able to cover their needs, 56% of them are also not able to have savings, which shows an even more grim image of the economic situation.