Double-digit inflation, currency devaluation and IMF conditions increase the pressure on middle-income households
Pakistanis spent nearly two out of every 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 Household Integrated Economic Survey 2024 to 2025, released by Federal Minister for Planning Ahsan Iqbal on Thursday, found that household expenditure grew faster than income due to rising cost of living. The study, conducted after more than six years in line with International Monetary Fund program commitments, reported that higher prices reduced household purchasing power, leaving only 2.5 percent of income available for education, which was less than spending on restaurants and hotels.
The study found that the share of foreign remittances of household income rose from less than 5 percent to almost 8 percent. It added that the contribution from gifts and aid more than doubled to 4.6 percent, which it described as “greater reliance on informal support networks”.
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Independent economists said out-migration among young workers has increased due to limited employment opportunities. The study also reported greater reliance on remittances in rural households, which it said had roughly doubled over six years.
A senior official from the Pakistan Bureau of Statistics said the increasing reliance on remittances and aid reflected declining domestic sources of income and the impact of double-digit inflation. The bureau, which operates under the Ministry of Planning, conducted the survey from September 2024 to June 2025.
The report stated that average monthly household income increased over the past six years, with urban households earning more than rural households. Urban income rose from Rs53,000 to Rs96,767, while overall average income rose from Rs41,545 to Rs82,179, reflecting an average annual growth rate of 16.3 percent.
However, income differences continued. In the last financial year, the poorest 20 percent of households earned Rs 41,851 a month compared to Rs 139,317 for the richest 20 percent. Expenditures rose faster than incomes, rising from Rs37,159 to Rs79,150, representing an average annual increase of 19 percent.
“The data reveals a clear concentration of spending in key categories that reflects current economic pressures, changing spending behavior and evolving household priorities,” the study said.
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Compared to 2019, total household consumption increased, which the survey linked to higher living costs, changing consumption patterns and improved access to goods and services. Households spent an average of 63 percent of total expenditure on food and housing with electricity and gas.
Food accounted for 37 percent of total household spending, while housing, electricity and gas accounted for 26 percent, according to the survey.
The study noted challenges facing households 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.
Within the food category, expenditure on milk accounted for the largest share at 22 per cent, followed by wheat at 12 per cent, sugar at 9 per cent and cooking oil at 6 per cent.
After allocating 63 percent of spending to food and housing-related categories, households spent smaller shares on education, health, and recreation. Combined, these categories accounted for 7 percent of total spending in 2024 to 2025. The report stated that spending on education was 2.5 percent, health was 3.4 percent and recreation was 1.1 percent. It added that the share of education spending had almost halved over six years, while the share of health spending remained largely stable.
The survey found that spending on clothing fell compared to six years earlier, while spending on food and housing-related categories increased. The largest increases were recorded in housing, electricity and gas, followed by restaurants with 6.6 percent and clothing with 6.3 percent. The report stated that spending on restaurants was more than double the share of education and was primarily driven by higher income households.
