(MENAFN- Live Mint) A new study highlights the deepening economic crisis in Pakistan as financial hardship escalates among urban households. With 74% struggling to meet monthly expenses, a 14% increase from last year, the impact is widespread.
Coping strategies range from cutting essential expenses to borrowing and taking on additional work. As the government unveils economic plans amidst mounting debt, the situation remains precarious for millions of Pakistanis.
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The study, which surveyed over 1,110 respondents across Pakistan's 11 largest cities between July and August, paints a grim picture of the country's economic landscape. A year ago, in May 2023, 60% of households reported financial difficulties. Today, that number has climbed dramatically.
The impact of this financial strain is evident in the coping strategies adopted by affected households. Sixty per cent have been forced to reduce essential expenses, including groceries, while 40% have turned to borrow money from acquaintances. Additionally, 10% of respondents have taken on part-time work to supplement their income.
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Even among those managing to cover their basic needs, 56% are unable to set aside any savings, further highlighting the precarious financial situation faced by many urban Pakistanis.
Pulse Consultant 's CEO announced plans for a more extensive follow-up study later this month. This upcoming survey aims to assess the impact of inflation on purchasing and consumption habits, with a larger sample size of over 1,800 respondents across 17 major Pakistani cities.
Against this backdrop of economic distress, the Pakistani government, led by Shehbaz Sharif, unveiled a three-year economic plan last month. The plan proposes to increase the provinces' share in the federal budget from 39.4% to 48.7% by 2027. However, it also acknowledges the country's mounting debt burden, projecting total debts to reach PKR 79,731 billion by the end of the current fiscal year.
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The government claims to be working on debt reduction strategies, including refinancing and interest rate risk management. In a related development, Pakistan recently secured a three-year, $7 billion aid package deal with the International Monetary Fund (IMF).
However, a report last month revealed that government borrowings in the first 11 months of the outgoing fiscal year have surpassed the combined borrowings of the two preceding fiscal years, underscoring the depth of Pakistan's economic challenges.
As Pakistan grapples with these economic hurdles, the impact on its urban population serves as a stark indicator of the broader financial distress facing the nation of approximately 240 million people.
(With Inputs from ANI)
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