Pakistan’s economic recovery is increasingly uneven, with wealthier households benefiting while lower-income groups continue to lose income and savings, according to a household survey cited by The Express Tribune.
Maaz Aazam of Optimus Capital Management, referencing findings from the Pakistan Bureau of Statistics’ Household Integrated Economic Survey, noted that average monthly household income in dollar terms declined by 3.4% between FY2019 and FY2025. However, this aggregate figure hides significant disparities across different income groups.
The survey reveals that the poorest 20% of households experienced an income decline of nearly 12% over the period, while the second-lowest income group saw a reduction of more than 7%. In contrast, the top 20% of earners saw their incomes grow by about 7%, highlighting a recovery that disproportionately benefits wealthier segments of society.
Spending patterns reflect this divide. Expenditures by higher-income households rose by around 13%, while the poorest households cut their spending by more than 10%. Middle-income groups showed only slight changes, indicating that purchasing power remains constrained for much of the population.
Savings have also declined across all income categories since FY2019, with lower-income households seeing the most significant erosion of their financial buffers, Aazam said. He added that GDP per capita, a broad measure of average income, has decreased in dollar terms since reaching its peak in FY2022, and is not expected to return to that level until around 2029.
The data also shows a shift in household spending priorities, with more funds directed towards essentials. By FY2025, spending on food, housing, energy, and transport will account for about 69% of total household expenditure, up from roughly 66.6% in FY2019. Meanwhile, expenditures on health and education have dropped by 19%, and discretionary spending has also contracted.
