Rising inflation is impacting Eid al-Fitr celebrations in Pakistan. Eid al-Fitr is a significant religious commemoration celebrated by Muslims worldwide, marking the end of the holy month of Ramadan. It is a time for family gatherings, feasting, and giving to charity.
During Eid al-Fitr, it is customary for Muslims to buy new clothes, gifts, and food items to celebrate the occasion with their family and friends. However, due to rising inflation, the prices of goods, daily necessities, and food items are on the rise, and it is harder for people to afford the things they need for Eid al-Fitr.
Persisting inflation has significant effects on a country’s economy and its people, particularly those with fixed incomes or living in poverty. Additionally, inflation can lead to a rise in poverty and hardship for those already struggling to make ends meet. This can be particularly challenging during the holiday season when expectations for spending and generosity are high.
Pakistan is dealing with what is considered the worst phase of political and economic disarray since former Prime Minister Imran Khan was removed from power in April 2022 by a legislative vote on a no-confidence motion. Pakistan’s economy is sinking, which has badly affected all areas of life, and no sector seems to be secure.
Despite claims and statements to the contrary, Pakistan’s coalition government’s self-proclaimed “experienced” economic team has yet to deliver any significant results. The competence of Pakistan’s finance minister, Ishaq Dar, still needs to be proved.
According to the latest index of the Heritage Foundation, a Washington-based conservative think tank working on policy impact, “Pakistan’s economic freedom score is 49.4, making its economy the 152nd freest in the 2023 Index. Its score is 0.6 points higher than last year.”
“Pakistan is ranked 33rd out of 39 countries in the Asia–Pacific region, and its overall score is below the world and regional averages,” the report added.
The report also stated that “much of the workforce is underemployed in the informal sector. Inflation has been quite high, disrupting monetary stability.”
According to the Pakistan Bureau of Statistics data, Pakistan’s inflation rate jumped to 35.4% in March 2023 from 31.5% in February. This is the highest it has been since December 1973.
Increasing food, beverage, and transportation costs pushed the consumer price index for March 2023 to 219.14 points, driving inflation to levels not seen in almost half a century. To raise extra revenue for the running fiscal year, in February, the coalition government lifted the goods and services tax to 18%, which further led to a spike in prices. Furthermore, the government has allowed the rupee to depreciate as it is struggling with the International Monetary Fund to catch $1 billion in financial aid.
Inflation in Pakistan touching highest level in decades
With a population of more than 220 million, South Asia’s largest Muslim country, inflation is touching its highest level in decades, meanwhile political mayhem has left the country in a state of uncertainty. Due to the devaluation of the rupee and the government’s move to end subsidies, the families of the salaried class have also been affected, along with the other segments of society.
Bisma Ayesha is a senior teacher at a state-owned elementary school in Islamabad. Ayesha’s husband is a bank manager, and they run the household together. They have three daughters who are college students.
Ayesha told The Media Line, “Our monthly income is much higher than that of an average Pakistani, but it has become very difficult for us to afford our children’s monthly fees. This Eid, we will be celebrating in a simple way and staying at home.”
Naseer Ahmed runs a shop selling bags, jewelry, and cosmetics in the city of Rawalpindi. “There are no customers, there are no buyers,” he told The Media Line. “Now, I am afraid that I will not be able to pay the monthly rent of this shop. Celebrating Eid seems far away, and it will be difficult for us to buy sweets and gifts when it has been our tradition,” Ahmed added.
“Our monthly income is much higher than that of an average Pakistani, but it has become very difficult for us to afford our children’s monthly fees. This Eid, we will be celebrating in a simple way and staying at home.”
Bisma Ayesha
Naz Bibi, a 50-year-old widow who washes dishes and sweeps houses, told The Media Line, “She has five children, and running a home has become very challenging.” When The Media Line asked Bibi about home expenses, she replied in a sad tone, “At the moment, it is very difficult to afford even a single meal per day. Earlier, from the houses where I worked, I used to get leftover food for my kids, but now it doesn’t happen anymore. This time, hardly any sweet dish can be prepared in our house.”
It’s not just Ayesha, Ahmed, or Bibi’s story; a majority of Pakistan’s people are facing the same economic hardships due to the poor policies of the coalition government. The Media Line spoke with Saddam Hussein, a research economist at The Pakistan Institute of Development Economics (PIDE) in Islamabad, a premier economic/research think tank and degree-awarding institute in Pakistan.
“Pakistan’s small shops and businesses benefit greatly from the conclusion of Ramadan, which is Eid el-Fitr,” Hussein told The Media Line. “It is a week of lavish spending that could match the earnings of the entire year. However, the current year has brought with it a sense of apprehension among people who fear that they might not be able to fulfill their monthly rent obligations, owing to the highest levels of inflation witnessed in decades and the political unrest that has created a state of ambiguity in the country, clamping down much of the economic activity,” he added.
Hussein told The Media Line, “The cash-starved country of more than 220 million people experienced year-on-year inflation of 35.4% in March. Food prices jumped more than 47% over a single year, with transport costs rising by 55%, thanks to global oil prices.” Hussein noted, “One can imagine the intensity of the current economic crunch, especially for the middle and lower-middle-income classes, by just looking at the price of a food basket. Before, it consumed under 35% of their maximum income. Now, the food basket costs around 70% of one’s income. The rest that is left of the income is to be paid in utility bills. Nothing remains to have other things, unless you borrow, which has its own disadvantages,” he further added.
Yaseen Ayaz, a researcher based in Quetta, the provincial capital of Balochistan, and a public policy graduate of PIDE, told The Media Line, “The current wave of high inflation has badly affected the purchasing power of the middle and low-income strata of the Pakistani population.”
In reply to The Media Line’s question, Ayaz said, “There are two ways to reduce inflation in a country: either to increase the income of the people or to decrease the prices of daily use items. As far as the recent government is concerned, it has badly failed on both fronts. They have neither reduced the prices of daily use items nor been able to increase the income of the common people,” he added.
He further told The Media Line, “Pakistan is in a difficult situation on all fronts. Political instability has complicated the path toward a stable economy. Default threats are looming. If this situation continues, we can expect dire circumstances within a short period of time.”