As inflation continues to climb and purchasing power weakens, Pakistan faces a complex economic challenge that demands immediate action from policymakers. The sharp decline in bank borrowing highlights the financial struggles faced by businesses and households.
Speaking to WealthPK, Majid Shabbir, Policy Advisor to the Islamabad Chamber of Commerce and Industry (ICCI), noted that inflation has surged to its highest levels in decades, driven by a mix of global commodity price increases, supply chain disruptions, and domestic economic policies.
“The Consumer Price Index (CPI) has consistently shown double-digit growth over the past year, significantly diminishing the purchasing power of the average Pakistani household. Prices of essential goods like food, fuel, and utilities have risen sharply, causing a reduction in discretionary spending.”
Shabbir explained that the current economic difficulties result from both external and internal factors. The country’s heavy dependence on imported goods has left it vulnerable to global price fluctuations. Additionally, the depreciation of the Pakistani rupee against major currencies has further driven up import costs, intensifying inflationary pressures.
