In Pakistan today, the debate is no longer about poverty alone — it is about survival with dignity. The cost of living has risen so sharply that for millions of households, earning a livelihood no longer guarantees food security, education, healthcare, or even social stability. The alarming reality is that while economic indicators are discussed daily in official briefings and television talk shows, the voices of ordinary citizens — farmers, labourers, small shopkeepers, teachers, and salaried employees — remain largely unheard.

The crisis is not merely inflation. It is the collapse of purchasing power.

Pakistan experienced one of the sharpest price shocks in its economic history in recent years. Consumer price inflation approached 30 percent year-on-year at its peak in 2023, largely driven by electricity and fuel costs. Although inflation has since slowed into single digits, this does not mean prices have fallen — it only means they are rising more slowly. For households, the overall price level remains permanently elevated, and incomes have not recovered their previous purchasing power.

During the past few years, prices of essential commodities — wheat flour, sugar, milk, cooking oil, pulses, fuel, electricity, and transport — have multiplied. However, wages have not followed the same trajectory. A government employee, a factory worker, or a private school teacher earns almost the same real income as five years ago, yet spends nearly double on daily necessities. The result is predictable: households are cutting meals, withdrawing children from schools, postponing medical treatment, and falling into permanent debt.
Food inflation has been particularly severe.

Economic analyses based on household consumption data indicate that rising food prices have been the single largest source of welfare loss for low-income families, and compensating households for the increased cost of living would require transfers amounting to nearly 40 percent of their previous expenditure.
In rural Pakistan, the situation is even more severe. Small farmers are trapped between rising input costs and unstable market prices. Fertiliser, diesel, animal feed, veterinary medicines, and electricity tariffs have increased dramatically. Transport costs alone surged sharply during the inflationary period, quickly raising farm-gate costs and retail food prices. Livestock — traditionally the economic safety net of rural families — is becoming unaffordable to maintain. A dairy farmer cannot raise milk prices proportionately because urban consumers themselves cannot afford higher prices. Thus, both producer and consumer are suffering simultaneously, an economic paradox that reflects structural policy failure.

This is not an accidental crisis; it is a policy disconnect.
Economic decisions are often made using macroeconomic targets — fiscal deficit reduction, exchange-rate stabilisation, or revenue collection — without adequate assessment of their microeconomic consequences. Increasing electricity tariffs may improve budgetary arithmetic, but it raises irrigation costs, transport charges, food prices, and ultimately household expenditure. Energy price adjustments have been a major contributor to inflation, and recent tariff restructuring has shifted a significant burden of power sector costs directly onto households. The poor do not experience these changes as statistics; they experience them as hunger.

Another neglected dimension is the salaried middle class. Historically, this class formed the backbone of state institutions: teachers, veterinarians, nurses, engineers, clerks, and technical staff. Today, they are quietly slipping below the poverty line. The inflation shock reached levels close to 40 percent at its peak, while salaries adjusted only marginally, resulting in a substantial contraction of real wages across much of the formal workforce. Unlike labourers, they have no wage bargaining power; unlike businesses, they cannot pass costs onto consumers. Their income is fixed, but their expenses are not. The erosion of this class carries serious consequences — institutional inefficiency, declining education quality, brain drain, and social frustration.
The government often announces relief packages, subsidies, or short-term price controls.

These measures may provide temporary political comfort, but they do not address the root causes. Pakistan’s problem is structural: low productivity, weak agricultural planning, inefficient distribution systems, energy mismanagement, and policy inconsistency. Without long-term reforms in agriculture, livestock, and small industry — the sectors that actually generate livelihoods — inflation will keep returning in waves.
Food inflation particularly demands attention.

Pakistan is an agricultural country, yet basic nutrition is becoming inaccessible. Milk, meat, and eggs — the primary sources of protein — are rapidly moving beyond the reach of ordinary families. Sustained increases in food prices reduce protein consumption among low-income households, weakening human capital formation and future workforce productivity. This is not only an economic issue but a public health emergency.
Equally worrying is the silence surrounding informal workers. A significant portion of Pakistan’s economy operates outside formal labour protection — daily wage labourers, street vendors, transport workers, and domestic employees. For them, inflation is not an inconvenience; it is the difference between eating and not eating. Yet policy discussions rarely include them because they do not appear in formal datasets.
The real question, therefore, is not whether policymakers are aware of the crisis. It is whether policymaking mechanisms are listening to those affected by it.

Effective governance requires feedback from the ground. Economic policy must incorporate agricultural experts, livestock specialists, labour representatives, and small-business stakeholders. Without this, policies remain technically sound on paper but socially disruptive in practice. A country cannot stabilise its economy while destabilising its households.

Pakistan’s strength has always been its people’s resilience. Families adjust, communities support one another, and individuals sacrifice personal comfort for collective survival. But resilience is not an infinite resource. When basic livelihoods become unaffordable, social cohesion weakens, migration increases, and public trust declines.

The cost of livelihoods is no longer merely an economic statistic — it is a national stability issue. Even as headline inflation has declined statistically, the cumulative rise in prices since 2022 has permanently altered household budgets, meaning economic stabilisation has not yet translated into social stabilisation.

If policymakers truly wish to achieve economic recovery, they must shift the focus from abstract fiscal numbers to household economics. The success of any economic programme should not be measured only by foreign exchange reserves or tax collection, but by a simple question: Can an ordinary working family live with dignity from its income?
Until that question is answered honestly, the public will continue asking a different one:
Who listens?

Dr Alamdar Hussain Malik
Advisor,Veterinary Sciences,
University of Veterinary and Animal Sciences, Swat.
Former Financial Adviser,Finance Division