Food, housing consume 63% of household spending in Pakistan

Pakistanis spent nearly two out of every three rupees on food and housing related expenses, while reliance on foreign remittances and financial assistance increased to support household spending, according to a new government survey.

The Household Integrated Economic Survey 2024 to 2025, released by Federal Minister for Planning Ahsan Iqbal on Thursday, stated that household expenditures grew faster than incomes due to rising living costs. The survey, conducted after more than six years in line with International Monetary Fund programme commitments, reported that higher prices reduced household purchasing power, leaving only 2.5 percent of income available for education, which was less than spending on restaurants and hotels.

The survey stated that the share of foreign remittances in household income rose from below 5 percent to nearly 8 percent. It added that the contribution of gifts and assistance more than doubled to 4.6 percent, which it described as “greater reliance on informal support networks”.

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Independent economists said outward migration among young workers has increased due to limited employment opportunities. The survey also reported higher reliance on remittances in rural households, which it stated had roughly doubled over six years.

A senior official of the Pakistan Bureau of Statistics said rising dependence on remittances and assistance reflected shrinking domestic income sources and the impact of double digit inflation. The bureau, which functions under the Planning Ministry, conducted the survey from September 2024 to June 2025.

The report stated that average monthly household income increased over the past six years, with urban households earning more than rural households. Urban income rose from Rs53,000 to Rs96,767, while overall average income increased from Rs41,545 to Rs82,179, reflecting an average annual growth rate of 16.3 percent.

However, income gaps persisted. In the last fiscal year, the poorest 20 percent of households earned Rs41,851 per month compared to Rs139,317 for the richest 20 percent. Expenditures increased faster than incomes, rising from Rs37,159 to Rs79,150, which represented an average annual increase of 19 percent.

“The data reveals a clear concentration of spending in essential categories, reflecting current economic pressures, changing consumption behaviour and evolving household priorities,” the survey stated.

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Compared to 2019, overall household consumption increased, which the survey linked to higher living costs, changing spending patterns and improved access to goods and services. Households spent an average of 63 percent of total expenses on food and on housing with electricity and gas.

Food accounted for 37 percent of total household spending, while housing, electricity and gas made up 26 percent, according to the survey.

The survey noted challenges faced by households in recent years, including prolonged double digit inflation, currency depreciation that contributed to imported price pressures, and policy adjustments under IMF programmes, which it said had a greater impact on middle income households.

Within the food category, spending on milk accounted for the largest share at 22 percent, followed by wheat at 12 percent, sugar at 9 percent and cooking oil at 6 percent.

After allocating 63 percent of spending to food and housing related categories, households spent smaller proportions on education, health and recreation. Together these categories accounted for 7 percent of total expenditure in 2024 to 2025. The report stated that spending on education was 2.5 percent, health was 3.4 percent and recreation was 1.1 percent. It added that the share of education spending had almost halved over six years, while the share of health spending remained broadly stable.

The survey found that spending on clothing declined compared to six years earlier, while expenditure on food and housing related categories increased. The largest rises were recorded in housing, electricity and gas, followed by restaurants at 6.6 percent and clothing at 6.3 percent. The report stated that spending on restaurants was more than double the share of education and was primarily driven by higher income households.