Inflation’s Impact on Pakistan’s Vulnerable Population


Pakistan is currently facing one of the worst economic crises in its history, with millions of people struggling to make ends meet. The cost of living crisis has hit the country hard, with inflation reaching record levels and the economy struggling to stay afloat. Many families are being forced to make tough decisions, such as taking children out of school or working multiple jobs just to put food on the table.

Sakina Bibi, a 52-year-old maid in Islamabad, is one of those facing difficult choices. Her daughter Sana was recently diagnosed with cancer, and Bibi doesn’t have enough money to pay for her treatment as well as send her son Ali to school. She made the difficult decision to take Ali out of school so he could stay at home and care for his sister while she works at three different houses to make ends meet. Bibi earns just above Pakistan’s minimum wage of $90 per month.

Ghulam Murtaza Abbasi, a 59-year-old former laborer from Murree, had to relocate to Islamabad four months ago to work as a security guard to support his wife and five children. He found a job at a petrol station, but admits he only got it through the help of an acquaintance. Abbasi works seven days a week and sends 70% of his monthly salary of $100 back to his family in Murree. He cannot afford to send two of his children to school.

Inflation in Pakistan has surged to 31.5%, its highest level since 1974, according to the latest figures released by the Pakistan Bureau of Statistics on March 1. The news sent the rupee tumbling, with the currency losing more than 6% of its value against the US dollar in a single day. The central bank hiked interest rates to 20%, a nearly three-decade high, in an attempt to stem rapidly surging inflation.

The government has been desperate to reach an agreement with the International Monetary Fund (IMF) to resume a $6.5bn loan program that has been essentially suspended since last November. The IMF has put forward a set of demands for the release of a $1.1bn installment that includes the liberalization of the exchange rate, the removal of subsidies in various sectors, and raising taxes. The two sides held formal negotiations for 10 days in early February, and the government has gradually fulfilled most of the conditions set by the fund.

Economist Ammar Habib Khan warned of tough days ahead due to the depreciating rupee and increased demand that will take place during Ramadan when the breaking of the dawn-to-sunset fasting is typically a period of celebration. Ayesha Khan, the regional Director for Acumen Fund, a global non-profit, said she expected food prices to get even higher as the fasting month approaches.

Already, people are feeling the pain. Faisal Ahmed Mir, manager of a welfare trust in Islamabad which runs 18 facilities in the city providing free food, said they used to have close to 10,000 people coming every day but in the last few months, the figure has easily gone beyond 13,000 at least. Laborers who previously could buy food at small roadside cafes can no longer afford it.

Muhammed Waheed, a 45-year-old roadside barber, said last year a patron had bought him groceries for the whole month of Ramadan. This year, however, Waheed does not know what he will do for his family of six. “Eid is always a difficult time. Children look up to us for giving them new toys or clothes. Yet we are struggling with what to eat daily; how can I promise to buy them new clothes?” he told Al Jazeera.

The government must focus on reducing price volatility and ensuring social safety nets for the vulnerable are robust, said Ayesha Khan. While negotiations with the IMF are about to conclude and all economic indicators are slowly moving in the right direction, many Pakistanis are still struggling to meet their basic needs.