By Nimra Durrani
ISLAMABAD, Aug 18 (APP): Pakistan’s economic landscape has been marred by fluctuating inflation rates over recent years, with notable changes from 2018 to 2022. Inflation rates surged from 5.08% in 2018 to a peak of 19.87% in 2022. This volatility has significantly influenced public behavior and heightened financial insecurity, leading to a compromised quality of life. The economic strain has not only intensified financial woes but has also eroded social values and community bonds, weakening traditional support systems and social cohesion.
Pakistan’s recent efforts to tackle economic instability, such as refining monetary policies and investing in key sectors, are commendable. Yet, achieving enduring stability will require more consistent, long-term measures. Strengthening economic fundamentals, boosting investor confidence, and implementing comprehensive reforms are crucial to achieve this economic stability.
Inflation in Pakistan is driven by an excess money supply from expansive monetary policies, which raises prices when it outstrips the availability of goods and services. Political instability further exacerbates the issue by undermining investor confidence and increasing operational costs for businesses. Additionally, fluctuations in the rupee’s value heighten uncertainty, as a weaker rupee raises import costs and servicing foreign debt, diminishing consumers’ purchasing power and affecting both imported and domestic goods.
Kanwal Syed, 44, an educationist and mother of three studying children, spoke to APP about her struggles with the rising cost of living. She shared, “Inflation has drastically changed our daily lives. We were forced to move our children from a private school to a more affordable one due to high fees. Dining out or going on family trips is now beyond our budget. We’ve had to rely on public transport to save on fuel, which affects our quality of life. The ongoing financial stress has made me anxious and overwhelmed. We’re struggling to maintain our previous lifestyle, and it’s impacting our mental well-being.”
Akhtar Malik, 52, a small business owner specializing in decorating for weddings and events, once regarded as well-off, expressed his difficulties to this scribe. He said, “Rising prices affect every aspect of my life. I’ve had to cut back on personal expenses and reduce spending on non-essentials. Keeping up with living costs is challenging and is taking a toll on my mental health. This financial strain is also affecting my relationship with my spouse. The pressure of managing a tighter budget and not being able to afford simple pleasures is impacting my overall health.”
The psychological impact of inflation is profound. Rising prices and reduced purchasing power lead to increased financial stress and anxiety. Managing a tighter budget is overwhelming, especially for those living paycheck to paycheck. The constant pressure of meeting daily needs amid fluctuating prices contributes to significant mental strain.
A clinical psychiatrist Dr Maryam, commenting on the current economic volatility and its impact on human health, particularly among the lower middle class, said, “Economic instability has a deep effect on mental health. For the lower middle class, rising costs and reduced financial security heighten stress and anxiety. This demographic often experiences a significant psychological burden, including increased rates of anxiety, depression, and other mental health issues. Managing tighter budgets and coping with financial uncertainty can significantly affect overall mental health. Addressing these challenges is crucial, as understanding the link between economic conditions and psychological well-being is vital. For instance, out of the patients she examines, a substantial number have psychological issues rooted in economic complications.”
She also pointed out that isolated incidents of suicide and increasing rates of immigration are tragic consequences of the economic strain. “This is contributing to unpleasant outcomes, highlighting the urgent need for comprehensive support systems,” she added.
in a nutshell, Pakistan’s experience with inflation reflects the complex interplay between exchange rate dynamics, production costs, political stability, and monetary policy. These factors shape an economic environment where consumers must navigate rising costs and adjust their spending habits. Understanding the multifaceted nature of inflation and its effects on consumer behavior is essential for both individuals and policymakers. This financial stress underscores the broader implications of inflation on everyday life, and demands effective policy responses for ordinary public.
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