Court decision in Panama case should help country correct budget spending, revenue collection. PHOTO: REUTERS
ISLAMABAD:
Pakistanis spent two out of every three rupees on just two basic needs — food and electricity — as reliance on foreign remittances and financial assistance increased to meet growing expenditures, a new government survey showed.
The expenditures increased at a faster pace than the incomes due to current economic pressure and rising cost of living, according to the Household Integrated Economic Survey 2024-25, released by the Minister for Planning Ahsan Iqbal on Thursday.
The findings of the survey, conducted after a gap of over six years under pressure from the International Monetary Fund (IMF), have shed light on how inflation has eaten up people’s hard-earned money, leaving only 2.5% in hand to spend on education. The spending on education was less than half the cost of housing.
The share of foreign remittances in household income has risen from below 5% to nearly 8%, according to the survey. The contribution of gifts and assistance also more than doubled to 4.6%, “indicating greater reliance on informal support networks”, stated the official report.
There has been an exodus of young and talented people from Pakistan due to limited employment opportunities, according to the independent experts. These findings tell how difficult it has become for people to make ends meet.
There was a higher reliance on foreign remittances by rural households, which doubled in six years and indicating lower employment opportunities available to the majority of the country’s population.
The higher reliance on foreign remittances and assistance by others reflects the shrinking domestic sources of income and the impact of double-digit inflation, according to a senior official of the Pakistan Bureau of Statistics (PBS).
The PBS, which falls under the administrative control of the Planning Ministry, conducted the survey from September 2024 to June 2025. The survey report stated that the average monthly income has increased significantly across households in the past six years. But the urban households recorded higher income levels than the rural households, rising from Rs53,000 to Rs96,767.
The overall average income increased from Rs41,545 to Rs82,179 in six years, averaging 16.3% per annum. But there were also wide income disparities. In the last fiscal year, the poorest quintile earned Rs41,851 per month compared to Rs139,317 by the richest 20%.
Compared to a 16% increase in monthly income, the expenditures rose by one-fifth during this period, according to the report. The average monthly consumption expense increased from Rs37,159 to Rs79,150, an average 19% per annum increase.
Expenditures
“The data reveals a clear concentration of spending in essential categories, reflecting current economic pressures, changing consumption behaviour and evolving household priorities,” stated the survey. Compared to the 2019 survey, overall household consumption in the last fiscal year increased, reflecting rising cost of living, changing consumption priorities and improved access to goods and services.
The data showed that the households, on average, spent 63% of their total expenses on just two functions, food and shelter, with electricity and gas facilities. The data further showed that the household expenditure is the highest on food, standing at 37%, followed by 26% spending on housing, electricity and gas, reflecting the rising cost of basic food and utilities, according to the survey.
Pakistanis faced multiple challenges during the past few years, which included record-high double-digit inflation, unprecedented currency devaluation that caused imported inflation and harsh conditions of the IMF programmes that mostly put the burden on the middle-income groups.
The survey showed that spending on food and shelter was higher than in the 2019 era, which also reinforced the adverse impacts of double-digit inflation and the outcomes of the conditions set by the IMF, translated into more taxes and more energy prices.
Within the food group, the expenses on milk were the highest at 22%, followed by 12% on wheat, 9% on wheat and 6% on cooking oil. After spending 63% on just two items, there was little in hand to spend on the development of the mind and a healthy body.
Households’ combined spending on education, health and recreation remained at just 7% in 2024-25, according to the survey. Lower expenditure is recorded on education, only 2.5%, health 3.4% and recreation 1.1%, stated the official report.
The data further revealed that the spending on education has almost halved compared to six years ago, while health spending remained “broadly stable”. There was also less spending on clothing. The survey stated that the largest increase was witnessed in expenses on housing, electricity and gas, followed by 6.6% on restaurants and 6.3% on clothing.
The spending on eateries at restaurants was more than double the expenses on education. The higher ratio of expenses on restaurants is among higher-income groups.
