OPINION: The quiet collapse of households

Pakistan’s policy elite is in celebration mode. Inflation has eased from last year’s extremes, the exchange rate looks calmer, and “stabilization” is being sold as recovery. But if you want to know whether the economy is actually healing, don’t look at press conferences or macro dashboards. Look at the kitchen table.

The HIES 2024–25, just released by Pakistan Bureau of Statistics (PBS), offers a window into how households are coping. What it shows is not recovery. It is compression — of diets, of dignity, and of opportunity. And this compression is not a temporary inconvenience. It is the early stage of a deeper social and economic fracture.

Start with food. The data on per capita monthly consumption (quantities) is quietly devastating. Between 2018–19 and 2024–25, average monthly consumption fell for the items that anchor a poor household’s survival. Wheat and wheat flour fell from 7.00 kg to 6.59 kg per person. Rice declined from 1.06 kg to 0.86 kg. Pulses, the cheapest protein for millions, fell from 0.35 kg to 0.26 kg. Milk fell from 6.85 liters to 6.15 liters per person. Even beef fell from 0.19 kg to 0.11 kg, and mutton from 0.06 kg to 0.05 kg. These are not lifestyle changes. They are distress signals.

When a society consumes less wheat, less pulses, and less milk, it is not “adjusting.” It is being forced to eat poorer. This is how real income erosion appears in a country where wages lag prices and informal work dominates. The most troubling part is what this implies for children: less protein, less dairy, and less dietary diversity translate into weaker physical development and lower learning capacity. You can call it stabilization, but malnutrition does not care about your macro narrative.

Now look at earning capacity. The HIES shows the average number of earners per household fell from 1.86 to 1.72 between 2018–19 and 2024–25. In urban areas it fell from 1.75 to 1.62, and in rural areas from 1.92 to 1.78. Punjab saw the sharpest hit, with earners per household dropping from 1.63 to 1.34. This is a structural warning: fewer income earners are supporting roughly the same household needs, at a time when essential costs — food, rent, transport and schooling — have surged.

This is where the “employment” story becomes misleading. Pakistan often comforts itself by saying people are working, therefore the economy is coping. But in Pakistan, work frequently means unstable hours, low productivity, and no protection. The HIES itself reminds readers that it counts someone as employed if they worked even an hour in the month or operated a business at any time in the year. That may be acceptable for classification, but it also masks a hard truth: employment no longer guarantees security.

The structure of employment is shifting in ways that should worry anyone who thinks the labour market is absorbing shocks. The share of employees rose from 54.80 percent to 60.10 percent, while self-employment declined from 24.70 percent to 21.75 percent. In plain language, Pakistan’s shock-absorbing informal entrepreneurship is weakening, and more people are becoming wage-dependent in an economy that does not reliably produce decent wages. When self-employment falls in a country with limited formal job creation, it usually does not mean prosperity; it often means small enterprises are being squeezed out by high input costs, weak demand, and regulatory friction.

In my earlier opinion titled “A workforce not ready for takeoff” published in Business Recorder, based on Labour Force Survey 2025, I highlighted the structural weakness of the labour force. Findings of HIES 2025 reinforces these labour market challenges due to lack of demand and innovation.

Then comes the energy squeeze, which is perhaps the most underappreciated driver of household collapse. The HIES shows that in 2024–25, electricity accounts for 55.91 percent of household fuel expenditure nationally, followed by gas at 18.85 percent. In rural areas, electricity is still the largest component at 44.23 percent, but the second-largest is firewood at 28.95 percent—a stark reminder that energy poverty remains real and persistent. High electricity tariffs may help balance circular debt spreadsheets, but they also function as a silent tax on households, forcing families to cut food quality, postpone medical care, and withdraw children from better schooling options.

This household compression is not occurring in a vacuum. It is the cumulative impact of overlapping shocks. Pakistan has lived through the COVID disruption, global commodity price surges, a major flood shock that damaged livelihoods and food systems, repeated rounds of exchange rate pass-through into prices, and a prolonged period of policy uncertainty that delayed investment and job creation. Natural shocks did not just destroy crops and homes; they raised food prices and increased vulnerability. Economic shocks did not just raise inflation; they weakened real wages and pushed more workers into fragile coping strategies.

The result is a quiet collapse that doesn’t show up in elite conversations: a household economy that is gradually losing its ability to feed itself well, invest in its children, and build resilience against the next shock. A country can survive one crisis. It cannot survive repeated crises if households are forced to permanently downgrade their diets and aspirations.

What does this mean for policy? It means the stabilization doctrine must be rewritten. If stabilization is achieved by crushing household consumption, it is not stabilisation — it is deferred instability. Hungry citizens, exhausted workers, and declining human capital are not the foundation of growth. They are the foundation of social stress.

Pakistan needs many reforms, but if you want one bold step that matches the scale of this crisis, it should be this: a Shock-Responsive Household Protection Guarantee — automatic, rules-based, and triggered by measurable stress indicators. Not another discretionary package. Not another ad-hoc subsidy. A guarantee.

Link it to objective triggers like food inflation, energy tariff spikes, and disaster declarations. Use the country’s existing targeting infrastructure (NSER/BISP) and add nutrition-sensitive support — especially for children and pregnant women — because the HIES consumption declines are telling us exactly where the damage is happening. Make it automatic so households don’t have to beg the state every time the economy or climate punches them.

This is what serious states do in an age of overlapping shocks: they build automatic stabilizers for households, not just for markets.

The HIES 2024–25 is not merely a report. It is a warning written in the language of wheat, pulses, milk, and earners. If we ignore it and keep celebrating macro calm, we will wake up to a society that looks stable on paper and broken in real life.

Copyright Business Recorder, 2026