Cost of Living increases across Pakistan

16 June 2022 - Pakistan is in the middle of a political crisis and is bracing for yet another cost of living crisis. Pakistan's inflation rate has now reached 13.8%, ranking second highest in Asia after Sri Lanka, which recently declared bankruptcy, and is currently embroiled in political turmoil. Experts are predicting that the situation will worsen in the coming days.

Long hours of power outages are having a significant impact on business and daily life. People in Pakistan are witnessing power cuts of up to 8-12 hours a day, amidst a heatwave that is spreading across several countries in South Asia, including Pakistan. The country's fuel supplies are running out, causing the government to implement numerous preventative measures such as requiring wedding ceremonies to end by 10pm, limiting the use of air conditioners, and making work from home compulsory in many organisations.

This fuel crisis has also resulted in a food crisis, with prices of commodities rising by up to 17.3%, even in cities like Islamabad and Rawalpindi. For instance, the price of potatoes increased by more than 7%, while the cost of tomatoes increased by more than 6% in a relatively short period of time, negatively impacting household budgets and price of living across Pakistan. 

Energy supply also driving high prices

Trends in Pakistan's energy supply have also begun to drive a sharp cost of living increase in daily lives. Petrol prices have risen by Rs 24 per litre, reaching a record high of Rs 233.89. Pakistan's ex-prime minister, Imran Khan, has stated that the fuel price hike will disproportionately harm the lower and middle classes.

As macroeconomic indicators worsen, people are faced with double-digit inflation, as well as wage and job losses. All of these factors contribute to growth stagnation and fewer opportunities for progressive change.

Conventionally, it was believed that Pakistan's large (40-60pc of GDP) informal economy would serve as a good buffer during periods of high inflation and slow economic activity. However, vulnerability surveys, as well as recent Labour Force Survey data reveal that this level of protection is no longer enough. The government requires a far more categorical and targeted approach to protecting its citizens from unbridled inflation. Take our cost of living survey in Pakistan and contribute to wage information.