By Umar Shahid in Pakistan
The corporate media and the scribes of the ruling elite have once again unleashed the annual ritual of numerical deception. Every year the state repeats a sophisticated exercise in ‘book balancing’ to satisfy foreign debtors and the domestic elite. This year’s 2026-27 budget again proves that economic policy leaves the fundamental economic architecture of Pakistan untouched, and wealth remains hightly concentrated, while policies favour a tiny parasite elite.
The projected economic growth in the budget mainly depends on concessions to the elite, and the structural burden of the state is quietly passed down to the working majority, through inflation and indirect taxation.
Just one day before the budget was presented, the latest the Pakistan Economic Survey 2025-26 was released. In classical capitalist economics, such surveys are considered important because they give policy-makers a direction and information to take decisions.
The release of the survey was hailed in the high offices in Islamabad and the trading floors of the Karachi stock exchange as triumph of macroeconomic stabilisation. Yet this stubborn presention of a major ‘triumph’ is showcasing a false dawn.
The official lies regarding the economy of Pakistan are visible in terms of the socio-economic conditions of the impoverished masses. If we strip away the deceptive vocabulary of the state, the actual social indicators of Pakistan reveal a deep crisis that cannot be cured by IMF bailouts or technocratic manipulation. The true balance sheet of a decade of unbridled capitalist exploitation is laid bare.
But this fabricated spreadsheet of ‘stability’ is a cruel farce. It is a statistical mirage that stands in stark, mocking contrast to the living hell endured by most of the Pakistani people. Behind this cold, unproductive numbers of capitalist economics lies a tragic landscape of social devastation, human misery and an unprecedented decay of the social fabric.
For the masses, these statistics do not represent progress; they represent the tightening of the noose of finance capital around the necks of the poor.
The anatomy of social ruin – poverty at a 10-year high
Official government statistics point with celebratory fervour to a four-year high in GDP growth, of 3.7%, a spectacular corporate run pushing the stock exchange index, the KSE-100, past an astronomical 169,000 points and the generation of a primary fiscal surplus to satisfy the ruthless accountants of the IMF. But they deliberately ignore that even as GDP accelerated to 3.7% (beating last year’s 3.18%), the poverty headcount remained anchored at 10-year high.
The Pakistan federal budget for 2026-27 is a master-stroke in statistical manipulation. It showcases an increase in per capita income. But with estimated GDP of Rs 126,870 bn ($451 billion) and a population estimate of 253 million, Pakistan’s per capita GDP was $1,782, not $1,901 as the government claims.
The official national poverty headcount has climbed to a decade-high 28.9%. In the rural hinterlands, where feudal cruelty merges seamlessly with capitalist exploitation, the ratio stands at a crushing 36.2%. Even these numbers are a deliberate underestimation, calculated through the flawed “Cost of Basic Needs” methodology that fails to account for the actual survival costs of an average family.
Independent, scientific analysis puts the true poverty ratio closer to 43.5%, meaning that over 105 million souls have been pushed below the line of basic human existence. The Gini Coefficient – a measure of inequality – has worsened from 28.4 to 32.7, proving that the wealth squeezed from the sweat of the working class is accumulating exclusively in the vaults of the top five percent of the population.
There was a sharp removal of subsidies in energy, fuel, and agricultural input, to help secure the government’s fiscal surplus of 3.2% to 3.5% of GDP. This acted as a severe and direct cost shock to rural and daily-wage communities. In the same context, although average consumer inflation cooled to 7% over the first eleven months of Fiscal Year 26 families are still facing the cumulative weight of the preceding years.
The past 10-year trend of Pakistan’s core economic, financial and social indicators reveal a striking disengagement with reality on the ground. Over the past decade (2017–2026), Pakistan has swung through distinct boom-and-bust cycles. So-called macro-stabilisation efforts have brought nothing but endless misery for masses.
The impacts of inflation, currency depreciation, and structural tax policies have left the real estate sector sluggish, unemployment and poverty levels increased. Historically, a GDP growth rate above 3.5% helps reduce unemployment and poverty, yet, in FY26, despite a four-year high in GDP growth, both unemployment and poverty remained stuck at their highest points.
Unemployment at 7.1% means leaving nearly 6 million people discarded by the formal economy. Even more damning is the Out-of-Labour-Market ratio, which reveals that 53.7% of the entire working-age population is completely excluded from the workforce. This exclusion takes an institutionalised, patriarchal form: 78.6% of all working-age women are locked out of the formal economy, and confined to unpaid domestic labour without social protections.
Illusion of growth
Whenever the Pakistani economy grows beyond a baseline of 3.5%, it triggers balance-of-payments crisis, because its growth model is built entirely on imported consumption and luxury goods for the rich. To fix the deficits they therefore create, the ruling class runs to the IMF for loans. Then, to fix the balance of payments, the brutal policies dictated by the IMF are implemented.
These IMF policies mean the immediate rollback of subsidies on necessities like electricity, gas, etc, and the implementation of regressive indirect taxes that burden the poor, as well as a brutal devaluation of Pakistani Rupee. Hence each time GDP grows, it brings with it more blood, sweat, and tears of the working class.
Even the cooling of inflation to 7% is a mere statistical trick, because the working class is still reeling from the cumulative, weight of the 30% inflation endured over the previous three years. A worker whose wages have stagnated, while the price of flour, milk, and electricity tripled cannot eat a GDP growth rate.
We were also told that the construction sector grew by 5.73% this fiscal cycle. However, that sector did not build affordable housing for the millions living in urban slums or flood-devastated villages. It built an infrastructure of luxury commercial and guarded housing schemes for the elite.
While the masses starve, the parasitical ruling class has spent the last decade converting land, which was considered a basic human right, into a casino for black money speculation. The massive capital gains accrued in the speculative real estate boom of the early 2020s did not build schools or hospitals; it funded the luxury lifestyles of a predatory capitalist class.
Pakistan’s capitalism is fundamentally organic, decaying, and dependent. The local ruling elite, composed of an unholy alliance of semi-feudal landlords, industrial robber-barons and military parasites is completely incapable of developing the productive forces of society or even building a modern economy.
This class maintains its profit margins, not through technology innovation or industrial expansion, but through the ruthless exploitation of cheap labour and systematic plunder using the state. Since its inception, the Pakistan state has functioned as a security-state rather than a welfare state, as the ruling elite has systematically underfunded the human infrastructure of society.
Education spending less that 1% of GDP
Public expenditure on education has fallen to a historic low of just 0.8% of GDP. The healthcare system is in ruins. Instead of investing in the education and health of its people, the state spends its resources servicing an astronomical external debt and maintaining a bloated repressive apparatus.
The government proposes a huge 17.65% hike in defence spending, allocating to it a total of Rs3 trillion ($10.8 billion). But while the state prioritises “invincibility” against external actors, it leaves the population utterly defenceless against structural internal violence: poverty, disease, and ignorance. The federal government is going to spend roughly 3.8 times more on the security apparatus than it is on the entire federal development programme combined, and this highlights where the state’s fiscal priorities lie.
The argument by the state is that health and education sectors are ‘devolved’ but the provinces lack independent financial sovereignty and are themselves burdened with debt, and devolution without central financial backing amounts to structural abandonment. Also, by freezing the recurring grants for education, the state is effectively forcing public universities to “privatise” their costs by increasing student fees, therefore systematically restricting access to the affluent, and reinforcing the class divide.
The expanded allocations to charity programs like the Benazir Income Support Programme (BISP) are proudly presented by the government as social ‘safety nets’, but they, too, are historical admission of economic failure. They are proof that the capitalist market cannot provide jobs or living wages, obliging the state to hand out some meagre crumbs to prevent an outright social explosion.
Many of the youth of Pakistan believe that their only salvation lies in fleeing the country. Millions of our brightest minds: engineers, doctors, and skilled workers are leaving in droves, seeking a life of labour alienated from their families in the Gulf. Or they are risking their lives in the Mediterranean Sea to escape the living tomb that capitalism has made of their homeland.
Down with the Budget of IMF chains!
The government budget document is a demonstration of a post-colonial state acting as both an enforcement agent for international creditors and as a custodian of domestic cartels. By systematically defunding human development—slashing healthcare and higher education to a combined fraction of a billion dollars, while maintaining an expansive security apparatus—the ruling elite has made its priorities clear.
The ruling class chooses to build roads for commerce rather than hospitals for the poor, and protects corporate profits while leaving the working class to bear the brunt of hyperinflation through regressive indirect taxes. All the lessons of the past decade are written in the suffering of the Pakistani masses.
Within the confines of the capitalist system and narrow the boundaries of the nation-state, there is no way out. No technocratic budget and no amount of imperialist debt packages can alter a downward spiral of societal decay.
It is evident that capitalism has exhausted its historical potential, and it can offer nothing to the people of Pakistan but inflation, unemployment, ignorance and humiliation. To break the chains of this misery, the commanding heights of the economy: the massive industrial monopolies, the private banks and vast land estates of the elite must be nationalised under the democratic control of working class. The staggering wealth of corporate giants must be expropriated.
The current situation mirrors the explosive contradictions that led to the great revolutionary uprising of 1968–69, when the students and workers of Pakistan shook the foundations of Ayub Khan’s dictatorship. Today, the objective conditions for revolution are more ripe than ever.
The task of history falls upon the shoulders of the advanced youth and the organised working class. They must build a mass revolutionary party based on the unyielding principles of scientific socialism. Only through socialist revolution, we can eradicate poverty, unleash the true potential of our youth, and cross the threshold from the kingdom of necessity into the kingdom of real human freedom.
[Inset picture of Shehbaz Sharif from Wikimedia Commons, here]
