DR Miftah Ismail and I co-wrote a column in these pages on Jan 9 explaining how people in Pakistan are “eating less” today than in 2018-19, despite spending more on food.
The piece created considerable ripples. Dr Faisal Bari, a senior economist, subsequently wrote about the “difficult times” people are enduring and referred to our analysis. Other economists have echoed similar concerns in recent weeks. Khurram Hussain wrote about the “end of stability” on Jan 15, while Akbar Zaidi stated plainly on Dec 19, 2025 that the economy is “in decline.” Fahd Husain captured the public mood succinctly when he wrote “V for victory and H for hunger”, again referring to our findings.
The concerns about the economy are reinforced by the recent press conference of S.M. Tanveer, a senior leader of the Federation of Pakistan Chambers of Commerce and Industry and a prominent industrialist. He revealed that 140 to 150 textile mills have permanently shut down, while several other major companies are “on a ventilator” due to the mind-bogglingly high cost of doing business in Pakistan.
This, he warned, is resulting in rising unemployment and the collapse of the manufacturing sector, and he aptly described the current so-called stability as stagnation.
Who, then, would invest in Pakistan in such an environment?
Unsurprisingly, earlier this week the State Bank of Pakistan reported a sharp 43 per cent decline in foreign direct investment during the first six months of the current fiscal year (FY26), compared to the same period in FY25.
The bottom line of all these deeply troubling voices is clear: regardless of official claims, the economy is hitting ordinary people extremely hard. Daily life has become a struggle for millions. What is being presented as economic stability increasingly resembles economic strangulation for poor and near-poor households.
Catastrophic health expenditure has been rising steadily.
After reading Dr Faisal Bari’s article, I found myself reflecting on the story of Iqbal, a driver, and his economic misery. Earning Rs65,000 per month — including tips and overtime — he once managed to get by. However, inflation and rising utility bills have made it nearly impossible to make ends meet. He first stopped eating lunch to save money. Then, the recent diagnosis of a liver ailment in his wife, who already suffers from diabetes and hypertension, pushed the family into a debt trap. It is unclear whether, or how, he will ever escape it.
In health economics, this situation is described as catastrophic health expenditure, which for blue-collar workers can quickly turn into impoverishing health expenditure.
Financial hardship due to out-of-pocket (OOP) health spending occurs when direct payments at the point of care reduce a household’s ability to meet basic needs. The World Health Organisation defines catastrophic health expenditure as OOP health spending that exceeds 10pc of a household’s total budget, although higher thresholds are also used. Impoverishing OOP spending refers to health expenses that exceed a household’s discretionary budget or leave it with no discretionary income once health payments are made. Those affected fall into two groups: households pushed further into poverty and those newly driven below the poverty line.
In Pakistan, OOP health expenditures remain alarmingly high, accounting for about 47pc of total health spending. According to the Household Integrated Economic Survey, the average household spends 3.34pc of its income on healthcare. More worryingly, catastrophic health expenditure has been rising steadily. The proportion of the population spending more than 10pc of household income or expenditure on health increased from 3pc in 2010 to 4.5pc in 2018-19 and 5.4pc in 2021-22. Given the current inflationary pressures, the latest figures are likely to be even higher.
The Universal Health Coverage (UHC) Monitoring Report 2024 of Pakistan estimated that more than 13.4 million people in the country were at risk of falling into poverty due to catastrophic health spending. The latest UHC Monitoring Report 2025, released by the government last month, paints an even grimmer picture: 14.8m people are facing catastrophic health expenditures, and 11.1m have been pushed below the $2.15-a-day poverty line due to OOP payments.
This is precisely why financial protection is a core pillar of universal health coverage. Yet in Pakistan, financial protection is weakest where it is needed most. Most OOP health spending is incurred on primary healthcare, largely in the private sector.
The Pakistan National Health Accounts for 2021-22 included a special OOP health expenditure survey covering 24,809 households across urban and rural areas. The findings were stark: 82.79pc of OOP spending went to the private health sector, and nearly 73pc of total OOP health expenditures were for outpatient services, i.e., primary healthcare.
There are some tentative and slow moves to extend the Sehat Sahulat Programme to cover primary healthcare in the private sector, but progress remains limited.
Returning to Iqbal, who is technically above the poverty line but now overwhelmed by health-related expenses and forced to borrow to treat his wife’s three chronic conditions, the risk of slipping into poverty is real. He may compromise on his children’s education, adding them to the 25m out-of-school children in Pakistan. He may take on excessive overtime or another driving job, increasing the risk of exhaustion-related accidents.
Such is the tragedy of the poor and near-poor in the Islamic Republic of Pakistan. Millions of Iqbals are struggling to survive — eating less while spending more than before on food, health, and education. For a poor household, the arrival of a new utility bill is nothing short of a bombshell. The state remains largely absent for the poor and voiceless.
Is this the Pakistan that was envisioned — a country for which nearly a million people lost their lives and millions more migrated in hope?
The writer is a former SAPM on health with ministerial status, adjunct professor of health systems and president of the Pakistan Association of Lifestyle Medicine.
Published in Dawn, January 23rd, 2026
