Pakistan’s government touts economic stability, but the reality reveals a different story. Poverty has surged to an 11-year high at 29%, while income inequality reaches levels unseen in nearly three decades. Real household incomes dwindle, and unemployment hits a 21-year peak, leaving many feeling suffocated by the so-called stability.
Despite claims of stabilization, the country faces a paradox as it grapples with economic challenges. The IMF-led program, by cutting subsidies, raising energy prices, and tightening monetary policy, has slowed the economic decline. However, this stabilization is likened to emergency care rather than true recovery, as highlighted in a report.
As subsidies disappear and indirect taxes increase, the burden disproportionately affects lower-middle-income earners, daily wage workers, and small traders. While inflation may seem under control, the aftermath of the surge persists in daily life, turning essentials like food, electricity, and fuel into unaffordable luxuries. Wages fail to keep up with the rising costs, exacerbating the situation for many vulnerable groups.
The impact of these economic measures is starkly evident in the poverty statistics. Officially, 70 million people now live below the poverty line, with over a third of the rural population struggling to meet basic needs. In Balochistan, nearly half the population faces similar challenges, reflecting not just temporary hardships but deep-rooted structural issues.
Acknowledging the role of stabilization policies in the poverty spike, Planning Minister Ahsan Iqbal highlights the blunt nature of fiscal consolidation and currency devaluation. While these measures restore financial balance, they also squeeze households, exacerbating the plight of the vulnerable. The article points out that the blame cannot solely rest on the IMF, as Pakistan’s economic vulnerabilities stem from decades of neglecting necessary reforms.
