Double-digit inflation, currency devaluation and IMF conditions deepen pressure on middle-income households
Pakistanis spent nearly two out of every three rupees on food and housing-related expenses, while reliance on foreign remittances and financial assistance increased to support household spending, according to a new government survey.
The Integrated Household Economic Survey 2024 to 2025, released by Federal Planning Minister Ahsan Iqbal on Thursday, indicated that household expenditure grew faster than income due to rising cost of living. The survey, conducted after more than six years in accordance with International Monetary Fund program commitments, reported that higher prices reduced household purchasing power, leaving only 2.5 percent of income available for education, which was less than spending on restaurants and hotels.
The survey indicated that the share of foreign remittances in household income increased from less than 5 percent to almost 8 percent. It added that the contribution of gifts and assistance more than doubled to 4.6 percent, which it described as “a greater reliance on informal support networks.”
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Independent economists said outward migration among young workers has increased due to limited employment opportunities. The survey also reported increased reliance on remittances in rural households, which it said had roughly doubled in six years.
A senior Pakistan Bureau of Statistics official said the growing reliance on remittances and aid reflected shrinking sources of national income and the impact of double-digit inflation. The office, which reports to the Ministry of Planning, conducted the survey from September 2024 to June 2025.
The report states that average monthly household income has increased over the past six years, with urban households earning more than rural ones. Urban income increased from Rs 53,000 to Rs 96,767, while the overall average income increased from Rs 41,545 to Rs 82,179, reflecting an average annual growth rate of 16.3 percent.
However, income gaps persisted. In the last fiscal year, the poorest 20 percent of households earned Rs 41,851 a month, compared to Rs 139,317 for the richest 20 percent. Expenses rose faster than income, rising from Rs 37,159 to Rs 79,150, which was an average annual increase of 19 percent.
“The data reveal a clear concentration of spending on essential categories, reflecting current economic pressures, changing consumer behavior and evolving household priorities,” the survey stated.
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Compared to 2019, overall household consumption increased, which the survey linked to higher costs of living, changes in spending patterns and better access to goods and services. Households spent an average of 63 percent of total spending on food and housing with electricity and gas.
According to the survey, food accounted for 37 percent of total household spending, while housing, electricity and gas accounted for 26 percent.
The survey noted challenges faced by households in recent years, including prolonged double-digit inflation, a currency depreciation that contributed to pressures on imported prices, and policy adjustments under IMF programs, which it said had a greater impact on middle-income households.
Within the food category, spending on milk accounted for the largest proportion at 22 percent, followed by wheat at 12 percent, sugar at 9 percent and cooking oil at 6 percent.
After allocating 63 percent of spending to categories related to food and housing, households spent smaller proportions on education, health, and recreation. Together, these categories accounted for 7 percent of total spending between 2024 and 2025. The report indicated that spending on education was 2.5 percent, health 3.4 percent and recreation 1.1 percent. He added that the share of spending on education had almost halved in six years, while the share of spending on health had remained virtually stable.
The survey found that spending on clothing decreased compared to six years earlier, while spending on food and housing-related categories increased. The largest increases were recorded in housing, electricity and gas, followed by restaurants with 6.6 percent and clothing with 6.3 percent. The report indicated that spending on restaurants was more than double that on education and was driven primarily by higher-income households.
