A salaried employee receives their monthly salary, or a single business owner gets his monthly income. Before the month ends, most of their savings are being utilized for house rents, electricity bills, monthly groceries, educational expenses, and transportation.
There is a rapidly growing gap in income and expenditures. Salaries and inflation are not working proportionately. As the inflation is rapidly increasing day by day, salaries and incomes are static, and they are not even increasing 01% of the inflation. Annual salary increments are so low that when these increments occur, the basic household expenses are increased four times more than these increments. Middle-class families are finding it difficult to maintain their previous lifestyles because the lifestyle they are trying to maintain is getting costlier day by day and the incomes and salaries that people earn remains the same.
People who earn fixed monthly salaries or incomes are getting affected by inflation in many ways. The same salaries that covered their monthly groceries, house rents, educational expenditures, transportation, basic clothing, electricity, and other utility bills one year ago are now just covering their monthly groceries, house rents, and utility bills. It shows that the purchasing power of people is decreasing day by day with a rapid increase in inflation.
Purchasing power refers to the quantity of goods and services a person can purchase with their income.
According to a January 2026 analysis by Gallup Pakistan, based on the Pakistan Bureau of Statistics' Household Integrated Economic Survey (HIES) 2024–25, average household incomes in urban Pakistan increased by approximately 83% between 2018-19 and 2024-25 in nominal terms. However, after adjusting for inflation, urban household purchasing power declined by approximately 17%.
According to the Pakistan Bureau of Statistics’ October 2026 inflation report:
· National CPI (Consumer Price Index) inflation reached 9.6% year-on-year.
· Urban inflation stood at 9.5%.
· Rural inflation stood at 9.8%.
· Monthly national inflation increased by 1.1%.
Inflation does not just affect the financial stability of people but also affects their quality of life. People are now prioritizing their basic needs and fulfilling those needs that are much more essential for their survival. With this rising inflation, people have eliminated their wants, and they are now just facing so many difficulties in fulfilling their basic necessities of life.
Increasing rents, house maintenance, utility bills and energy expenses, food, fluctuating prices of petrol, public transportation, school fees, medicine and healthcare are the basic necessities of every person, and people in Pakistan are managing all these expenses with a salary that is only enough to do a monthly grocery shopping. These things are also managed by decreasing one commodity and increasing the other commodity.
Inflation does not affect everyone equally.
Lower-income households are struggling to fulfill their basic necessities, depending on financial assistance from relatives, reducing food consumption, or compromising on healthcare. They generally have less financial flexibility because a greater proportion of their income goes towards basic necessities.
Middle-income households are unable to maintain their previous lifestyles, struggling with rent, school fees, and utility bills. Their reliance on credit and borrowed money is increasing.
Economic uncertainty affects people’s ambitions and future planning and causes human consequences of financial pressures. Financial pressure is causing stress among salaried employees, anxiety about monthly expenses, and creating family conflicts. Young adults are delaying their marriages, and parents are compromising on their children’s educational opportunities due to financial pressures. Professionals are working additional jobs to support their families due to financial instability. Youth are rapidly moving abroad to seek better career growth.
Short-term remedial action is not sufficient to address the economic difficulties of urban Pakistan. Sustainable solutions should focus on increasing household purchasing power and creating an economic environment where earnings are sufficient to allow for a reasonable standard of living.
Salary adjustments should be made according to inflation and the real cost of living. Targeted subsidies should be provided to financially vulnerable households, and better public transport can reduce commuting costs for working people.
Likewise, affordable housing projects, affordable healthcare, and quality public education can lessen the financial burden on families.
Government bodies also need to enhance market surveillance to dissuade price manipulation and exploitation of businesses.
Most importantly, sustainable job opportunities and economic growth are central to enabling people to better their financial situations through productive work.
Economic issues in urban Pakistan are not just about rising prices. They are about the gap between what people earn and what they can afford, which is widening.
The salary that once afforded financial freedom might now only cover the basics. Families that have been able to save are increasingly dipping into those savings to meet their daily responsibilities.
Economic progress should not be measured exclusively through financial indicators or growth percentages. Its real significance lies in whether ordinary citizens can afford decent housing, nutritious food, quality education, and accessible healthcare without constantly compromising their needs.
Ultimately, the objective should not be to help people survive the economic storm but to enable them to create the conditions for a secure and dignified life.
