Is the Middle Class Disappearing as the Pakistani Government Supports 'Paper Growth' for the Wealthy?
Synopsis
A recent report reveals that the Pakistani government's focus on 'paper growth' sectors is exacerbating wealth inequality, leading to a significant decline in middle-class stability and increasing hardships for the poorest households. This alarming trend, characterized by a stark divide in income growth, threatens the economic future of millions.
Key Takeaways
Government policies are favoring sectors that do not promote real investment.
The poorest households have suffered a 12% income decline since 2019.
In stark contrast, the wealthiest have seen a 7% income increase .
Overall savings have decreased by 66% , impacting basic living standards.
Expenditure on health and education has dropped by 19% .
New Delhi, Jan 10 (NationPress) The government in Pakistan is currently promoting sectors that generate 'paper growth', which may contribute to GDP increases but fail to inspire true commercial investment. This includes real estate, a sector where the affluent often park their wealth and allow it to appreciate, as highlighted in a recent report.
Since 2019, the most disadvantaged 20 percent of Pakistani households have experienced a significant drop in their real monthly earnings, plunging by nearly 12 percent, according to commentary in The Express Tribune.
In stark contrast, the wealthiest quintile has seen their incomes rise by 7 percent. While this figure may not appear substantial at first glance, it is critical to understand it was achieved during a time when the economy was in deep decline, average salaries outside the public sector were falling, and poverty rates were soaring.
Unfortunately, savings have nearly evaporated for the majority, with an overall reduction of 66 percent, as families are forced to dip into their reserves merely to meet basic needs.
As a result, expenditure on health and education has plummeted by an alarming 19 percent, which poses significant challenges for the future.
The Editorial further underscores that behind the facade of headline growth and a flourishing stock market lies a devastating 'K-shaped' recovery that disproportionately benefits the wealthy while impoverishing the less fortunate and eroding the middle class.
The outcome is an economy that boasts record luxury car sales and a thriving stock market, even as demand for cement and essential goods remains stagnant.
Another recent article from The Express Tribune has reported that Pakistani households are now compelled to allocate nearly two-thirds of their income towards food and electricity, marking a shift from growth to mere survival.
Referring to the latest Household Integrated Economic Survey from the Pakistan Bureau of Statistics, it indicates that life in Pakistan has increasingly become centered on basic survival.
The report also highlights how the declining purchasing power of the Pakistani rupee has rendered many household necessities unaffordable. This is not a sign of resilience but rather a manifestation of fragility masquerading as coping.
Point of View
It is evident that this report highlights a pressing issue within Pakistan's economic landscape. The disparity between the wealthy and the impoverished is growing, and the government’s focus on superficial growth rather than substantial investment threatens the future of the middle class. It is crucial for policymakers to address these inequalities to foster a more equitable economic environment.
NationPress
10 May 2026
Frequently Asked Questions
What is 'paper growth'?
Paper growth refers to economic growth that appears on paper, such as increased GDP, but does not translate into real commercial investment or tangible benefits for the broader population.
How has the situation affected the middle class in Pakistan?
The middle class is facing significant erosion as economic policies favor the wealthy, leading to decreased purchasing power and increased difficulty in affording basic necessities.
What sectors are contributing to this disparity?
Sectors like real estate, which primarily benefit the affluent, are being prioritized over those that could promote widespread economic growth and investment.
