KARACHI, March 24 (Reuters) – Naureen Ahsan earns more than double the average wage in Pakistan, but school officials say she has no choice but to homeschool her daughters and postpone her London Authority-certified final exams because she cannot afford her education.
Like most people in the nation of 220 million, Ahsan and her husband, who owns an auto service business, are struggling with a rise in the cost of living prompted by the government’s devaluation of the currency and the removal of subsidies to pave the way for the latest tranche of an International Monetary Fund (IMF) bailout package needed to avert economic collapse.
Pakistan is no stranger to economic crises – this is the IMF’s fifth bailout since 1997 – but economists say recent measures, which include higher taxes and fuel costs, are hurting educated professionals. Many say they cut down on what they need to make ends meet.
“We don’t eat out anymore,” Ahsan told Reuters. “We no longer buy meat or fish. I saved on tissue paper and detergent. We don’t meet friends, we don’t give gifts. Occasionally we yell at each other.”
The government-mandated minimum wage is about Rs 25,000, but with inflation hitting a record-breaking 31.5% in February, the highest rate in nearly 50 years, many people who earn much more say their pay is not enough for the whole month.
Abhi Salary, one of Pakistan’s largest fintech companies that enables its roughly 200,000 subscribers to withdraw wages in advance, says transactions have grown by more than a fifth each month for the past three months. Most people spend two-thirds of the money on groceries while rushing to stock up before prices start to rise again, said Abhi CEO Omair Ansari.
“Unfortunately, the poor in Pakistan have nothing to lose,” said Abid Suleri, of the Sustainable Development Policy Institute of Pakistan, an economic think tank. “Educated professionals … find their purchasing power and savings eroded and daily consumption either unaffordable or unaffordable.”
Ramadan, which began this week, is likely to increase price pressures in Muslim-majority Pakistan. Analysts are predicting that inflation will rise to at least 35% per month in March and April.
During the holy month, Muslims traditionally break their all-day fast with special foods and large family gatherings, culminating in the Eid al-Fitr celebrations. This year, for many people, Ramadan means tightening their belts.
“We are reducing the number of meals and eating out,” said Ahmed, a senior manager at a multinational company, who declined to give his last name because he was worried about a possible backlash from his employer. “It’s getting harder to buy sweets and gifts for Eid, which is a break with our family tradition.”
The economic turbulence is driving some professionals out of the country. Khaliq, a doctor who also declined to give his full name because he was embarrassed about his finances, said he and his wife, who is also a doctor, are working as hard as they can to qualify for the exams they take in the UK work.
“We’re thinking twice about eating out or using the car,” he said, adding that the flagging rupee is making the cost of her exam, which is denominated in British pounds, higher by the day. “We plan to pass the exams and move out as soon as possible.”
($1 = 282.7200 Pakistani Rupees)
Reporting by Ariba Shahid, writing by Miral Fahmy. Editing by Gerry Doyle
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Areba Shahid
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