Stagnant wages for the middle class in Pakistan exacerbate financial struggles as living costs rise sharply, driven by IMF reforms. Although consumer inflation decreased to a nine-year low, core inflation remains high, impacting household budgets. Many families are forced to take loans to manage basic needs, highlighting the ongoing economic challenges in the nation.
In Pakistan, media producer Benish Abbas has faced stagnant wages for three years, straining her family’s financial stability amid rising living costs driven by IMF reforms. Despite the consumer inflation rate dropping to a nine-year low of 2.4% in January, everyday expenses continue to climb without wage increases to match the economic environment. The challenges are widespread among the middle class, with rising rents and bills compounding financial struggles.
The South Asian nation is under a $7 billion IMF rescue plan, with the government hopeful about upcoming reviews. The recent interest rate cuts by the central bank have not translated to improved conditions for individuals like Raja Muhammad Haris, who earn low wages without salary raises over the past years, leading them to incur debts for basic needs.
Economist Sana Tawfik pointed out that while overall consumer inflation has decreased, core inflation remains concerning, hovering around 9% to 9.5%. This persistent inflation affects essential items like health care and educational materials, causing continued strain on household budgets even as some cost increases slow down.
Pharmacist Malik Nasir Khan noted that consumers are purchasing fewer medicines as costs rise sharply, impacting sales. Individuals are forced to borrow money to afford necessary items, demonstrating the financial strain faced by many. Fellow consumer, Farhana Asghar Khan, detailed her struggles in affording medication for her family, highlighting a common plight among families.
Economist Mushtaq Khan explained that stagnant incomes contribute to prolonged economic difficulty for the middle class in Pakistan. Though year-on-year inflation appears to be declining due to base effects, ongoing monthly price increases reflect a troubling trend for consumers as costs rise for utilities, clothing, and healthcare.
The article illustrates the economic hardships faced by the middle class in Pakistan as wages stagnate amidst rising inflation, driven partly by structural reforms from the IMF. Despite reports of falling consumer inflation, the ongoing struggle with core inflation and basic living costs leave many families in precarious financial situations. This persistent issue signifies a broader challenge for economic recovery in the nation, with implications for both policy and individual well-being.
Original Source: www.arabnews.pk
