Double-digit inflation, currency devaluation and IMF conditions add pressure on middle-income households
Pakistanis spent almost two in three rupees on food and housing-related expenses, while reliance on foreign remittances and financial aid increased to support household spending, according to a new government survey.
The Integrated Household Economic Survey 2024 to 2025, released by Federal Minister for Planning Ahsan Iqbal on Thursday, said household expenditure has grown faster than income due to rising cost of living. The survey, conducted after more than six years in line with International Monetary Fund commitments, found that rising prices reduced household purchasing power, leaving only 2.5 percent of income available for education, which was lower than spending on restaurants and hotels.
The survey indicates that the share of foreign remittances in household income increased from less than 5 percent to almost 8 percent. He added that the contribution from gifts and assistance more than doubled to 4.6 percent, which he described as “a greater reliance on informal support networks”.
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Independent economists have said emigration of young workers has increased due to limited job opportunities. The survey also found a greater reliance on remittances among rural households, which it said had almost doubled in six years.
A senior official at the Pakistan Bureau of Statistics said the growing reliance on remittances and assistance reflected dwindling domestic revenue sources and the impact of double-digit inflation. The office, which reports to the Ministry of Planning, carried out the survey from September 2024 to June 2025.
The report shows that average monthly household income has increased over the past six years, with urban households earning more than rural households. Urban income increased from Rs53,000 to Rs96,767, while overall average income increased from Rs41,545 to Rs82,179, reflecting an average annual growth rate of 16.3 percent.
However, income gaps persisted. In the last financial year, the poorest 20 percent of households earned Rs 41,851 per month, compared to Rs 139,317 for the richest 20 percent. Expenditure increased faster than income, from Rs37,159 to Rs79,150, representing an average annual increase of 19 percent.
“The data reveals a clear concentration of spending in essential categories, reflecting current economic pressures, changing consumer behaviors and changing household priorities,” the survey said.
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Compared to 2019, overall household consumption increased, which the survey links to a higher cost of living, changing spending habits and better access to goods and services. Households spent on average 63 percent of their total expenditure on food and housing along with electricity and gas.
Food accounted for 37 percent of total household spending, while housing, electricity and gas accounted for 26 percent, the survey found.
The survey highlighted the challenges households have faced in recent years, including prolonged double-digit inflation, currency depreciation that contributed to imported price pressures, and policy adjustments under IMF programs, which it said had a greater impact on middle-income households.
In the food category, expenditure on milk accounted for the largest share at 22 percent, followed by wheat at 12 percent, sugar at 9 percent and cooking oil at 6 percent.
After spending 63 percent of their spending on categories related to food and housing, households spent smaller proportions on education, health and leisure. Together, these categories accounted for 7 percent of total spending in 2024 and 2025. The report said spending on education was 2.5 percent, health was 3.4 percent, and leisure was 1.1 percent. He adds that the share of education spending has almost halved in six years, while that of health spending has remained generally stable.
The survey found that spending on clothing declined compared to six years earlier, while spending on food and housing increased. The largest increases were recorded in housing, electricity and gas, followed by restaurants at 6.6 percent and clothing at 6.3 percent. The report said spending on restaurants was more than double the share of education and was driven primarily by higher-income households.
