Written By:Hurish Shah
Published By:ANI News Agency
For years, Pakistan’s middle class has been seen as the backbone of the country’s economy. It works, earns, pays taxes, educates its children, buys homes, supports businesses and keeps markets moving. Yet today, a growing part of this same middle class is quietly struggling to maintain the standard of living it once considered normal.
The pressure is not always visible. A middle-class family may still have a job, a car, children in school and a roof over its head. From the outside, life may appear stable. But behind closed doors, many families are cutting expenses, postponing medical treatment, reducing savings and reconsidering plans for education, travel and home ownership.
This is the silent economic pressure facing Pakistan’s middle class.
The problem is not simply inflation in isolation. It is the accumulated effect of higher food prices, electricity and gas bills, transportation costs, education expenses, healthcare and taxation. Even when inflation slows, prices do not necessarily return to their previous levels. Families continue to live with the higher cost base created by several years of economic shocks.
A recent survey of salaried households published by Dawn provides a revealing picture. Nearly 65 per cent of respondents said their household’s financial position was somewhat or much worse than a year earlier. The survey also found a significant decline in the ability of households to save and invest. In 2021, more than 36 per cent of respondents said they were saving or investing more than 10 per cent of their income. By 2026, that share had fallen to just 12.5 per cent.
That change matters far beyond individual households.
Savings are not merely money sitting in a bank account. They provide families with protection against unemployment, illness, unexpected bills and economic shocks. When savings disappear, a household becomes more vulnerable. A single emergency can force people to borrow money, sell assets or cut spending on essential needs.
The pressure is particularly visible in household consumption. According to recent survey findings, grocery spending has increased sharply compared with the years before the inflation shock. Transport has also become a much larger burden. The proportion of surveyed households spending more than Rs30,000 a month on transport rose substantially between 2019 and 2026.
For many salaried families, the real problem is that income has not increased at the same pace as expenses.
A salary increment of 10 or 15 per cent may sound reasonable on paper. But if food, transport, utilities, school fees and other necessities have risen significantly over time, the increase can disappear before the month is over. This creates a frustrating situation in which people may be earning more in nominal terms but feeling poorer in practical terms.
The middle class also occupies an uncomfortable position in Pakistan’s social protection system. The poorest households may qualify for welfare programmes, charitable assistance or targeted subsidies. Higher-income households have greater financial flexibility. But the lower-middle and middle classes can fall between the two.
They may earn too much to qualify for assistance, but not enough to comfortably absorb rising costs.
This is why Pakistan’s economic debate needs to look beyond headline indicators.
Macroeconomic stability is important. Improving foreign exchange reserves, fiscal discipline and restoring investor confidence are necessary for the country’s long-term future. But economic stability cannot be considered complete if ordinary households continue to lose their financial security.
The government therefore faces a difficult balancing act. Pakistan needs revenue, structural reforms and fiscal discipline, but taxation policies must also recognise the pressure on salaried and middle-income households. A system that continuously increases the burden on the formal economy while leaving large parts of the informal economy outside the tax net risks discouraging documentation and investment.
At the same time, businesses cannot thrive when consumers have little disposable income.
A middle-class family that spends most of its monthly income on food, utilities, transport and education has little left for restaurants, clothing, electronics, home improvement or other discretionary purchases. When millions of families behave in the same way, consumer demand weakens. That affects retailers, manufacturers, small businesses and ultimately employment.
In this sense, protecting the middle class is not simply a matter of social policy. It is an economic necessity.
Pakistan needs policies that encourage better-paying jobs, productivity, investment and entrepreneurship rather than relying mainly on higher taxation and short-term relief. Education and skills development must be linked more closely with the needs of the economy. Small businesses need easier access to finance and a predictable regulatory environment. Energy costs must become more manageable for both households and industry.
Most importantly, economic growth must eventually translate into better living standards.
Pakistan cannot build a strong economy on statistics alone. Growth must be felt in the household budget. A family should be able to pay its electricity bill without sacrificing groceries, educate its children without going into debt and save something for the future after meeting basic expenses.
The middle class rarely demands special treatment. What it wants is predictability: predictable prices, reasonable taxation, better employment opportunities, affordable energy and the confidence that hard work will lead to a better life.
That confidence is perhaps the most important economic asset Pakistan can rebuild.
The country’s middle class has survived inflation, economic uncertainty and repeated crises. But resilience should not be mistaken for unlimited capacity to absorb pressure. If Pakistan wants sustainable growth, it must ensure that the people who keep its economy running are not gradually pushed out of economic security.
A strong middle class is not a luxury for Pakistan. It is one of the foundations of a stable, productive and prosperous country.
