Despite fall in inflation rate, stagnant incomes squeeze mid-income Pakistanis

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Updated 26 February 2025
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Despite fall in inflation rate, stagnant incomes squeeze mid-income Pakistanis

  • Consumer inflation rate fell to lowest in over 9 years, dropping to 2.4% year-on-year in January
  • Though prices now rising more slowly, cost of living not more affordable in absence of wage growth

KARACHI: Benish Abbas, a TV producer from Pakistan’s commercial capital of Karachi, has not received a salary increment for three years, making it difficult for her family to endure the mounting costs of living.

Her story is common among salaried middle-class Pakistanis reeling under rising prices largely brought on by tough reforms under the latest bailout from the International Monetary Fund, including higher energy costs and taxes on domestic consumers and businesses.

That Pakistan’s consumer inflation rate had fallen to its lowest in more than nine years — dropping to 2.4% year-on-year in January — was expected to bring relief to mid-income Pakistanis. But even as the prices of goods are now rising more slowly, the cost of living has not become more affordable for people like Abbas in the absence of wage growth.

Inflationary pressures have also triggered protests in recent months by traders and opposition political parties.

“My salary has not increased. My husband is in the same situation [for nearly a decade],” Abbas told Arab News in an interview from her small, rented house in Karachi’s Ancholi neighborhood where she lives with her husband and two daughters.

“The rent is increasing, school fees are increasing, our electricity bill has doubled, tripled … Our salaries keep us hand to mouth.”

Though fuel prices in Pakistan have declined multiple times in 2024 and 2025 due to lower international oil prices and exchange rate fluctuations, Abbas said it did not reflect on transport fares and thus made little difference to her family.

“STICKY CORE INFLATION”

The South Asian country, currently bolstered by a $7 billion facility from the IMF granted in September, is navigating a tricky path to economic recovery. The IMF is set to review Pakistan’s progress by March, with the government and central bank expressing confidence about meeting the targets.

Pakistan’s central bank cut its benchmark interest rate by 100 basis points to 12% last month, as inflation eases and growth looks set to pick up after 1,000 basis points of rate cuts over the last eight months.

The State Bank of Pakistan has slashed rates from an all-time high of 22% last June, one of the most aggressive moves among central banks in emerging markets and exceeding its 625 bps of rate cuts in 2020 during the COVID-19 pandemic.

After the policy rate decision, central bank governor, Jameel Ahmad, told a press conference that inflation would ease further in January but noted core inflation remained elevated. He forecast full-year inflation in the year to June would average 5.5%-7.5%.

But these measures have not improved the lives of mid-income individuals like 26-year-old Raja Muhammad Haris who earns less than Rs30,000 ($107) a month and has not gotten a salary increment in three years.

“The inflation has increased significantly in the last two to three years,” Haris, who supports a family of eight, said. “Yet, our salaries have not increased in proportion to the inflationary rate.”

A civilian employee of the Pakistani armed forces, Haris said he found it difficult to run his kitchen, forcing him to accumulate debt.

“We have to take a loan from the bank, sometimes we have to take it from a friend, from neighbors. We have to manage the house somehow, we have to run the house somehow,” he said. “Per month we have to borrow Rs20,000 [$71.56].”

Sana Tawfik, an economist and head of research at Karachi-based Arif Habib Limited, agreed that IMF-backed structural reforms carried out by Pakistani authorities, though necessary to put the economy on track, had burdened the average citizen.

While consumer price inflation had decreased, core inflation remained a major concern, she added.

Core inflation is a measure of inflation that removes volatile prices, like food and energy, from the consumer price index (CPI). This creates a more stable picture of underlying inflation trends, covering items like health care, textbooks, clothing, furniture, and electric appliances.

“Core inflation is still sticky and is hovering in the range of 9 to 9.5%,” Tawfik said. “It is expected to remain elevated.”

The economist said while inflation had declined significantly in terms of numbers, it continued to pressure a major chunk of the country’s population, especially due to high electricity and gas bills.

“Inflation is there, and prices are increasing,” she said, though the pace at which the two things had increased in recent months had slowed down.

Strained household budgets have also affected the sale of essentials like medicine.

Malik Nasir Khan, who runs a pharmacy at a largest medicine market in Karachi, said the prices of life-saving drugs like Paracetamol had almost doubled in just a month.

“The customers who used to buy monthly medicines are now buying medicines to last only 10-12 days,” Khan said. “Now they are not buying medicines, medicines are not being sold in large quantities.”

Housewife Farhana Asghar Khan, 48, said she had to borrow Rs1,000 ($4) from an acquaintance to buy medicines, the prices of which the ailing mother of three said exceeded far beyond her reach.

“My monthly medicines cost Rs1,500 [$5.37] and I took a loan of Rs1,000 [$3.58] from an acquaintance and bought medicines from it,” she said.

“For Rs300 [$1.07], I could only get two strips of pills.”

“BASE EFFECT IS KEY”

Mushtaq Khan, a Karachi-based economist, agreed that the status quo would continue as long as incomes were stagnant.

“The middle class is suffering as their incomes are stagnant in Pakistan while the poverty rate is increasing. The improvement in business sentiments from the economic stability is primarily felt by the elite,” he told Arab News.

Mushtaq said year-on-year inflation was low because of the base effect, which would end in May 2025, “which means the prices will start increasing from May (2025) onwards.”

He said the food sub-index had been stagnant since Oct. 2024 but was likely to move up from February onward.

“The prices of clothing have consistently increased in the range of 14%-17% year-on-year, but have come down from the 20 percent plus in 2023. The utilities and rent have settled down but will increase from April,” Mushtaq added.

Health costs remained high, rising year-on-year in the range of 13%-16%, while year-on-year inflation had decreased since 2023. Transportation costs had fallen as POL prices were down, but this was likely to reverse when the

petroleum development levy and general sales tax were added to fuel prices in the fourth quarter of this fiscal year, Mushtaq said.

“The base effect is key. The cost of living is a slow burn. The price levels may consistently increase but the year-on-year data is strongly influenced by the base effect,” the economist said. “That is the crux of the matter, prices are increasing on a monthly basis, but the year-on-year data shows a fall.”

Pakistan government spokesman Attaullah Tarar was not available for comment for this story. Officials from the ministry of finance also did not respond to requests for comment.


Trade, connectivity, regional cooperation in focus as Pakistani PM at ECO summit

Updated 4 sec ago
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Trade, connectivity, regional cooperation in focus as Pakistani PM at ECO summit

  • Theme of this year’s summit is “New ECO Vision for a Sustainable and Climate Resilient Future”
  • Sharif will hold bilateral meetings with other leaders attending summit to discuss matters of mutual interest

ISLAMABAD: Prime Minister Shehbaz Sharif will address the 17th Economic Cooperation Organization (ECO) summit in Khankendi, Azerbaijan today, where he is expected to present Pakistan’s views on regional and global challenges, trade promotion, sustainable development and enhanced connectivity.

According to a statement issued by the Prime Minister’s Office, Sharif will also hold bilateral meetings with other leaders attending the summit to discuss matters of mutual interest.

The theme of this year’s summit is “New ECO Vision for a Sustainable and Climate Resilient Future.” 

“Prime Minister Muhammad Shehbaz Sharif will participate in the ECO summit in Khankendi, Azerbaijan, where he will speak on global and regional issues, trade promotion, sustainable development, regional connectivity and solutions to regional challenges,” the PMO said.

The summit brings together heads of state and government from ECO member states to discuss economic and political cooperation. 

This is Sharif’s third visit to Azerbaijan in 2025. He last traveled to Baku in May, where he held talks with Azerbaijani President Ilham Aliyev on strengthening bilateral cooperation in energy and trade.

The Economic Cooperation Organization was established in 1985 by Iran, Turkiye and Pakistan and later expanded to include Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The ten-member bloc aims to promote economic, technical and cultural collaboration across Central and South Asia, the Caucasus and the Middle East.


Pakistan says 30 ‘Indian-sponsored’ militants killed trying to cross from Afghanistan

Updated 42 min 9 sec ago
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Pakistan says 30 ‘Indian-sponsored’ militants killed trying to cross from Afghanistan

  • Pakistan has witnessed a sharp rise in militant violence in its western regions that border Afghanistan
  • Islamabad often blames these attacks on India and Afghanistan, a charge denied by Kabul and New Delhi

ISLAMABAD: At least 30 “Indian-sponsored” militants were killed while attempting to cross into Pakistan through its border with Afghanistan this week, the Pakistani military said on Friday.

Pakistani security forces intercepted the militants in the restive North Waziristan district, according to the Inter-Services Public Relations (ISPR), the military’s media wing.

All 30 militants, belonging to “Indian proxy Fitna Al-Khawarij,” a reference to the Pakistani Taliban, were killed as a result of “precise and skillful engagement.”

“A large quantity of weapons, ammunition and explosives was also recovered from the killed Indian-sponsored Khawarij [militants],” the ISPR said in a statement.

“The interim Afghan government also needs to check and prevent the use of Afghan soil by ‘foreign proxies’ for orchestrating terrorist activities against Pakistan.”

New Delhi has not yet commented on the latest statement by the army but has repeatedly denied in the past that it is involved in militancy in Pakistan.

Pakistan has witnessed a sharp rise in violence in its western regions bordering Afghanistan, with Islamabad accusing India of backing militant groups and Afghanistan of allowing the use of its soil for attacks against Pakistan. Kabul and New Delhi deny the allegation.

The North Waziristan district has long been a stronghold of the Pakistani Taliban, who have mounted their attacks against Pakistani security forces and checkposts, and law enforcers since late 2022, when their fragile, months-long truce broke down with Islamabad.

On June 28, a suicide attack, claimed by Hafiz Gul Bahadur group of the Pakistani Taliban, killed 13 Pakistani soldiers and injured 29 people, including civilians, in the volatile district that borders Afghanistan, local government and police officials said.

A day later, the district administration imposed a 30-day restriction on the movement of people and vehicles from dusk till dawn, saying it was in the interest of “public safety, law and order, movement of security forces and [to] restrict the movement of outlaws.”

In a statement issued from his office, Prime Minister Shehbaz Sharif praised Pakistani security forces for foiling the militant infiltration attempt in North Waziristan.

“We are determined to completely eradicate all forms of terrorism from the country,” he said. “The entire nation salutes their security forces.”


Medical residents from Pakistan, other states fill critical positions in US, but running into visa issues

Updated 04 July 2025
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Medical residents from Pakistan, other states fill critical positions in US, but running into visa issues

  • The US is projected to face a physician shortage in the next 11 years, the Association of American Medical Colleges says
  • Over 6,600 foreign-born international medical residents matched into US programs in 2025, and another 300 filled positions

Some hospitals in the US are without essential staff because international doctors who were set to start their medical training this week were delayed by the Trump administration’s travel and visa restrictions.

It’s unclear exactly how many foreign medical residents were unable to start their assignments, but six medical residents interviewed by The Associated Press say they’ve undergone years of training and work only to be stopped at the finish line by what is usually a procedural step.

“I don’t want to give up,” said a permanent Canadian resident who matched to the University of Pittsburgh Medical Center Harrisburg but had her visa denied because she is a citizen of Afghanistan. She requested to remain anonymous for fear of reprisal. “But the situation also seems so helpless.”

Initially, the medical community was worried that hundreds of positions — many in hospitals in low-income or rural areas of the US — could be affected. The pause on interviews for J-1 visas for approved work or study-related programs was lifted in mid-June.

The national nonprofit that facilitates the residency match process said the visa situation is resolving, but it will take weeks to know with confidence how many medical residents have had the start of their careers derailed because they got their visa too late or were blocked by President Donald Trump’s travel ban on 12 countries, according to people who coordinate the residents’ training.

Four foreign medical residents told the AP that US embassies have been slow to open up interview slots — and some have not opened any.

“You lose out on the time you could have used to treat patients,” said one resident from Pakistan, who matched to an internal medicine program in Massachusetts and requested to remain anonymous for fear of reprisal.

Thousands of foreign medical residents fill gaps in US hospitals.

The US is projected to face a physician shortage in the next 11 years, per the Association of American Medical Colleges, and foreign medical residents fill critical gaps in the health care system. More than 6,600 foreign-born international medical residents matched into US programs in 2025 — the highest on record — and another 300 filled positions that were vacant after the match process was complete.

Not all of those residents were affected by visa issues or the travel ban on foreign nationals from countries including Afghanistan, Haiti and Sudan.

International medical graduates often take jobs in places where US medical trainees tend not to go, said Donna Lamb, president of the National Resident Matching Program.

“It’s not just that they’re coming in and they want to work in big, flashy centers on the coast,” Lamb said. “They’re truly providing health care for all of America.”

Foreign medical residents work in specialties that US applicants aren’t as eager to apply to. For example, international candidates make up almost 40 percent of residents in internal medicine, which specializes in the prevention and treatment of chronic conditions like diabetes and heart disease.

“The residents are the backbone of the entire hospital,” said Dr. Zaid Alrashid from Brookdale University Hospital and Medical Center in New York, which has medical residents from almost every continent. Most received their visas prior to the pause but a few were caught up in delays.

Two residents from India who spoke on condition of anonymity have not been able to get an appointment at any US embassies there despite the J-1 visa pause being lifted.

Another resident from Egypt just secured a visa appointment for mid-August but is worried her program may not be willing to wait for her. She’s already paid her security deposit for an apartment in Texas to live during her residency.

“I don’t know when this situation will be resolved,” said the resident, who spoke on condition of anonymity, adding she hasn’t been eating or sleeping well.

HOSPITALS WAITING FOR RESIDENTS

In California, leaders at two graduate medical education programs said they have a small number of residents caught up in J-1 visa delays. Both spoke on condition of anonymity due to concerns for the doctors who are still trying to get visas.

A residency leader at one large health care system said two doctors in its 150-resident program are delayed, adding they could start late or defer to next year. A 135-person program at a California public health system told the AP that one resident has yet to arrive, though he was finally scheduled for a visa interview.

“We are not going to breathe easy until he’s here in our hospital,” the second leader said.

As of Wednesday, Lamb’s matching program had received fewer than 20 requests to defer or cancel residency contracts.

Worried about losing their spots if they defer, many foreign medical residents may keep trying to get to the US and start their residencies late, said Dr. Sabesan Karuppiah, a past member of the American Medical Association’s International Medical Graduates Governing Council and former director of a large residency program.

Some hospitals may struggle at this point to replace the residents who don’t make it, leaving fewer people to care for the same number of patients, said Kimberly Pierce Burke, executive director of the Alliance of Independent Academic Medical Centers.

Foreign medical trainees who’ve made it into the US remain on edge about their situations, Karuppiah said.

“I can tell you the word on the street is: ‘Do not leave the country,’” he said, adding that people are missing out on important events, seeing sick parents or even getting married. “Everybody’s scared to just leave, not knowing what’s going to happen.”
 


Pakistan disaster authority warns of more showers, floods till July 10

Updated 04 July 2025
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Pakistan disaster authority warns of more showers, floods till July 10

  • Pakistan is currently bracing for an extreme monsoon season, which lasts till mid-Sept.
  • The country has already reported over 60 rain-related deaths in a little more than a week

KARACHI: Pakistan’s National Disaster Management Authority (NDMA) on Thursday warned of more monsoon showers, floods and landslides in the country between July 6 and July 10, urging citizens to exercise caution during the forecast period.

The development comes as Pakistan braces for an extreme monsoon season, which usually lasts till mid-September, with 64 people killed in rains and floods in a little more than a week.

More rains and strong winds are expected in Punjab’s Rawalpindi, Lahore, Faisalabad, Multan and Dera Ghazi Khan cities as well as the capital, Islamabad. Thunderstorms are likely to hit Swat, Chitral, Peshawar, Mardan and other areas of Khyber Pakhtunkhwa.

“Due to rains and other factors, there is a risk of flooding in low-lying areas, overflowing of rivers and canals and landslides in mountainous areas,” the NDMA said in its latest advisory.

The northern Gilgit-Baltistan region and Azad Kashmir may witness heavy showers, floods and landslides, according to the authority.

Similarly, downpours are expected in Karachi, Hyderabad, Sukkur, Tharparkar and other cities of the Sindh province as well as Quetta, Zhob, Khuzdar and Sibi in Balochistan.

“Stay away from weak structures, electricity poles, billboards. There is a risk of accidents due to reduced visibility in storms, be careful,” the NDMA asked citizens. “Stay away from rivers and canals.”

Pakistan, home to over 240 million people, is consistently ranked among the countries most vulnerable to climate change.

In 2022, record-breaking monsoon rains and glacier melt caused catastrophic floods that affected 33 million people and killed more than 1,700.
 


Czech climber missing in Pakistan after fall on Nanga Parbat expedition

Updated 04 July 2025
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Czech climber missing in Pakistan after fall on Nanga Parbat expedition

  • Klara Kolouchova, 46, reportedly fell from a height between Camp I and Camp II
  • Recovery efforts are underway to locate and retrieve her body from the fall site

ISLAMABAD: A Czech woman climber has gone missing after a fall during her attempt to summit Nanga Parbat, a Pakistani mountaineering club said on Friday.

Klara Kolouchova, 46, reportedly fell from a height between Camp I and Camp II of Nanga Parbat on Thursday, according to Karrar Haidri, secretary-general of the Alpine Club of Pakistan that organizes various expeditions.

“Authorities and rescue teams were immediately alerted and dispatched,” Haidri told Arab News. “Recovery efforts are underway to locate and retrieve her body from the fall site.”

Klara, an accomplished mountaineer, was globally recognized as the first Czech woman to summit both Mount Everest and K2. She had arrived in Pakistan on June 15, accompanied by her husband and five team members.

“Our thoughts and prayers are with her family, friends, and the mountaineering community during this difficult time,” Haidri said.

Nanga Parbat, the ninth-highest peak in the world at 8,126 meters, is infamous for its difficult terrain and high fatality rate, which has earned it the nickname “Killer Mountain.”

Over 100 climbers and porters have died on its slopes, with the Rupal face considered particularly unforgiving due to avalanche risk and exposure to extreme weather.

Earlier this week, three European climbers achieved a rare feat on one of the world’s most dangerous peaks by scaling Nanga Parbat from the treacherous Rupal face in alpine style, with one of them paragliding down from near the summit in a daring solo descent.

Unlike traditional expedition climbing, alpine style involves climbing in a single push without establishing fixed ropes or pre-stocked camps, requiring climbers to carry all their gear. The approach demands speed, efficiency and a high degree of skill, especially at high altitude.

German climber David Göttler was joined by French mountaineers Tiphaine Duperier and Boris Langenstein for the climb via the Schell route, a steep and rarely successful line up the mountain’s massive southern wall. The Rupal face, rising nearly 4,600 meters from base to summit, is considered the world’s highest mountain face and among the most technically demanding.

“Sometimes you need to be patient … It’s taken five attempts, but now that I’ve achieved it, I know it’s all been worthwhile,” Göttler wrote in a social media post on Tuesday, describing his 12-year pursuit of the route.

He said summiting with his teammates in alpine style was “incredible,” adding that being able to fly down from around 7,700 meters to base camp on the same day took his joy “to the next level.”