A Capital in Crisis

I am writing about the growing economic pressure in Islamabad, which is causing great concern among the public.

By: Mehwish Ali Akbar

I am writing about the growing economic pressure in Islamabad, which is causing great concern among the public. An economy is a system that includes the production, distribution, buying, selling, and consumption of goods and services. It covers all the activities that determine how a society uses its resources, generates income, and meets the needs of its people.

Pakistan’s economy is currently facing serious challenges due to continuous budget deficits, excessive public debt, and heavy dependence on IMF loans. Other issues, such as low tax collection, energy sector debt, agricultural problems caused by climate change, and high inflation, have also slowed economic growth and made life more difficult for people. Islamabad is also experiencing significant economic difficulties. The city is struggling with a large debt burden, very low domestic savings, and dependence on international bailout packages.

For salaried workers and the middle class, daily life has become much more difficult. Rising fuel prices, expensive utility bills, and the lingering effects of inflation have worsened the cost-of-living crisis. People in Islamabad are under severe financial pressure. Double-digit inflation, skyrocketing electricity and gas bills, and record-high fuel prices have made everyday life increasingly difficult. At the same time, salaries have not kept pace with rising expenses. This combination of increasing costs and stagnant incomes has weakened household purchasing power and lowered living standards. These economic challenges have created numerous problems, leaving citizens to bear the burden.

The State Bank’s main policy interest rate is currently around 11.5%. Although it has declined from its peak, it is still making it difficult for industries to obtain affordable loans. Overall inflation, as measured by the Consumer Price Index (CPI), has fallen compared with last year. However, the prices of essential goods continue to rise, reducing what households can afford. The federal government’s debt and liabilities have reached record levels. As a large portion of government revenue is spent on debt servicing, fewer resources remain available for public services.

Global political tensions have pushed fuel prices higher, increasing everyday expenses for people living in Islamabad. Salaried employees and taxpayers have been hit hardest by these economic adjustments. This burden has been made even heavier by repeated increases in electricity and utility charges. To reduce budget deficits, the government has introduced cost-cutting measures in federal departments through a process known as “rightsizing.” These measures are directly affecting job security in the capital.

Housing and utility costs remain very high, consuming nearly 25% of an average family’s monthly budget. Repeated increases in electricity and gas tariffs have made even basic utility bills unaffordable for many households, while commuters are paying significantly more for transportation. Due to rising fuel prices, transport companies and ride-hailing services have increased their fares. For salaried individuals, both daily commuting and owning a car have become major financial burdens.

Therefore, I kindly urge the responsible authorities to take prompt and effective action to address these economic challenges and provide relief to the people who are suffering.