Since 2008, incomes trail far behind soaring expenses

Published: September 28, 2011

People spent increasingly more on food, survey reveals.

ISLAMABAD: 

In the first three years of the Pakistan Peoples Party’s government, the average monthly household expenditure increased faster than the rise in income, affecting the poorest and the middle class the most and indicating an increase in poverty and inequality, revealed an official survey.

The Household Integrated Economic Survey (HIES) 2010-11, released on Tuesday, reflected poor performance on part of the incumbent government.

The survey, conducted by the Federal Bureau of Statistics, endorsed views held by economists that the policies of the incumbent government had widened the rich-poor divide and increased consumption inequality among various income groups.

The survey also indicated that many more people have been trapped in poverty. The survey compares the results with 2007-08 data, the last year of the Musharraf regime.

Almost half of households’ monthly income was spent on food stuff while people had to spend beyond their means to make both ends meet, the survey reveals.

Income, expenditure rise

According to the HIES, during last three years, the average monthly household expenditures increased 53% while the average monthly income rose 50%.

As shown in the accompanying table, the lower and middle classes were affected most by the inflation and declining incomes.

The average consumption expenditure of the richest class in urban areas is more than two and half times higher than the lowest income class and almost three times more than the same income class living in the rural areas.

The gap between the poorest and the richest is wider in urban areas than the rural areas, the survey confirmed.

Consumption patterns

The share of food expenditure out of total consumption is not just high, the survey reveals, it has increased from 44.3% in 2007-08 to 48.91% at present.

Households increased their consumption of wheat slightly, cutting back on milk while expenditure on sugar, despite its skyrocketing price, increased to 7%, from the 2008 level of 4.8%.

The lowest income class accorded more priority to wheat, milk, vegetable ghee, vegetables and sugar while the upper class spent more on milk, wheat, vegetables, fruits, mutton, beef, sugar and chicken.

The poor spent almost 70% of the total food expenditure on wheat, milk, vegetable ghee, vegetables and sugar, while the rich spent 48.1% on the same items.

The survey also revealed that expenditure on apparel, textile, footwear, housing, education, transport, communication, recreation and entertainment has shown a decreasing trend since 2007-08.

Published in The Express Tribune, September 28th,  2011.

Reader Comments (7)

  • Baqar
    Sep 28, 2011 - 8:55AM

    Democracy is the best revenge, and its taking revenge from the people

    Recommend

  • Mahmood
    Sep 28, 2011 - 9:36AM

    And so the punishment of the Pakistani people continues…

    Recommend

  • Rehan
    Sep 28, 2011 - 9:36AM

    It’s called a GLOBAL recession for a reason. It’s affecting every single country of the world. People in even the advanced, rich, and developed countries are finding it hard to survive these days with unemployment, falling wages, and soaring inflation. The years of 2004-2007 saw a GLOBALl economic boom until the GLOBAL financial crisis hit in 2008, which is when the PPP initiated its government in inconsequential Pakistan. But, even before they had taken charge, during the last months of the Musharraf dictatorship, Pakistan’s economy was already in free-fall. Thus, to blame the PPP for the economic condition of the nation is not only terrible journalism, but criminally absurd. I expect better from ET.
    Regards,
    Rehan (not a PPP supporter, but a pragmatist)

    Recommend

  • FK
    Sep 28, 2011 - 11:06AM

    Thats it: Strikes, Target killings, suicide bombings, corruption, robberies, mugging, kidanapping, extortion, drug trafficing, human smuggling etc etc etc etc

    PLEASE TAKE THAT INTO ACCOUNT TOO.
    Recommend

  • Sep 28, 2011 - 1:54PM

    Democracy is the best revenge.

    Recommend

  • Pundit
    Sep 28, 2011 - 4:06PM

    And the cost of hosting OBL at abbottabad is not yet included…..that will hit in the coming year….

    Recommend

  • uH
    Sep 28, 2011 - 6:29PM

    @ Rehan

    Not only are you only ill informed about the effects of the global financial crises, but you also lack comprehension skills. The article states that th e comparison is between the 3 years of ppp rule and musharraf’s LAST year in power when the crisis was already well underway and investor confidence was at its lowest!!

    Inflation was something western economic managers could only wish for despite slashing interest rates to zero. It was only a problem for developing economies like India and China and that too was (for the most part) due to rising demand. Inflation in Pakistan over this period due to somethingknown Aa the monetization of the deficit. I don’t expect people to understand the dynamics of the economy, but am compelled to point out that its because of absurd assuumptions like the ones I made without proper knowlede of either economics or facts that thus whole public sentiment against musharraf is there.Recommend

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