The skill of Pakistani parents shines through as they attempt to shield their children from the harsh realities of financial strain by ensuring they experience joy this Eid, just like any other.

People are trying to stay steadfast in upholding the tradition of celebrating this happy occasion together, welcoming family and friends, and demonstrating their will to maintain a sense of normalcy and happiness despite challenges.

A quick survey of various markets and interviews with leaders of multiple market bodies in major cities have confirmed that the trend of a shrinking Eid economy not only persisted but intensified this year.

According to marketeers’ responses, a notable trend in 2024 was the significant increase in children’s shopping. Typically, children’s expenses constituted 40 per cent of the total Eid spending, but this year, it was notably higher. Market projections suggested that as much as 50pc of an average Pakistani family’s Eid budget was allocated to fulfilling the needs and desires of children, both boys and girls.

People forgo their regular shopping patterns for cheaper clothes and accessories in the face of rising inflation, high utility bills, and declining real income

The slump hit markets frequented by the middle and upper-middle classes the hardest. Traders lamented that makeshift stalls flooded with copies of brands and cheaper accessories attracted a large percentage of genuine buyers. Meanwhile, they had to contend with the influx of window shoppers, which posed challenges to their businesses.

“Many families enter shops in the market, glance around and then proceed to stalls. With our inventories piling up, we are uncertain how we will manage in such circumstances, especially with rising overheads and utility charges,” Akhtar Shahid, a leader of the Hyderi market in Karachi’s middle-class locality of North Nazimabad, shared nervously.

Atiq Mir, a senior leader of traders, attributed the alarming situation affecting his class to massive declines in real income.

Unlike before, most adult males have switched from custom-made to ready-made clothing. This shift has led to a decline in business for men’s fabric and tailoring, which traditionally thrived during Ramadan.

Feeroz Ahmed, former president of the Cooperative Market Association, confirmed a major setback for fabric sellers and tailoring businesses. “A make-to-order dress costs at least Rs5,000 to Rs6,000, nearly double the price of a typical ready-made shalwar kameez for men. This has compelled even the most particular customers to opt for cheaper options,” he observed.

The search for bargains, which initially begins at malls, is often concluded at cheaper bazaars. “After several visits to markets, it became clear that shopping for the entire family from upscale malls is unaffordable,” remarked a woman shopping for embroidered lawn suits at Gold Mart, a relatively inexpensive marketplace on Korangi Road in Karachi.

“Despite the available saving offers and discounts, Eid shopping remains a challenge. Frequently, we find ourselves checking price tags and abandoning items that caught our interest. If we do make a purchase, it’s not uncommon to experience guilt for exceeding our budget. Even when we adhere to our budget, there’s often a lingering feeling that the item bought is over-priced,” noted a young mother at Dolmen Mall Clifton.

In the mega city, low-end markets outperformed shopping centres like Tariq Road, Hyderi and Clifton. This trend was also noted in other major cities across the country.

Online shopping, which gained momentum over the years, facilitated by the convenience of digital money transfers and especially favoured by the youth, was reported to be less robust than last year for obvious reasons.

Market contractions were not uniform across the city or the country. Predictably, Quetta and other cities in Balochistan seem to have been the worst hit by the current economic downturn.

Badruddin Kakar, a prominent business leader in Quetta, expressed concern, stating, “People crushed by inflation are now burdened with exorbitantly high utility bills. As long as the government prioritises stabilisation over growth, there is limited scope for job creation or salary increases. You can’t expect a vibrant market when pockets are empty.”

Despite its multiple bustling cities, Punjab cannot possibly be immune to the effects of economic slowdown, but it has fared relatively better. Naeem Mir, reached by phone in Lahore, anticipates an improvement in activity in the last week of Ramadan.

Many marketeers believed that Eid spending had hit rock bottom last year and anticipated an upward trajectory moving forward. This year’s experience has proven them wrong, as the Eid market is estimated to have contracted by at least 15pc to Rs368 billion compared to Rs432bn last year.

Upon further breakdown, based on back-of-the-envelope calculations, this translates to an Eid budget of Rs1,600 per person or Rs11,000 per family (assuming the family has six to seven members). This comprehensive budget covers all expenses such as transportation (both inter- and intra-city), clothing, food, Eidi, and any other related expenses.

These numbers are derived from educated estimations, and the projected variations in the market are expressed in percentages. Without any credible source quantifying the peak phase in annual spending in Pakistan, this exercise serves as a reference point, if nothing else.

Despite repeated annual approaches for input, relevant public sector entities such as the Pakistan Bureau of Statistics (PBS), the State Bank of Pakistan (SBP) and ministries and departments, like the Federal Ministry of Finance or Federal Board of Revenue (FBR), appear too preoccupied with their own routines to spare time or attention for such exercises which some argue fall beyond their mandate.

When reached by phone in Islamabad, PBS Chief Statistician, Dr Naeem uz Zafar, referred to the Household Integrated Economic Survey (HIES), which is conducted every other year to gather data on household income and expenditure and can provide insight into consumption patterns.

“The last HIES was conducted in 2022, and the next one is due this year. We are hoping to start the exercise in July after the budget. However, we do not have current or historical data on festival-specific spending by people,” he remarked.

The SBP’s Chief Spokesperson, Noor Ahmed, confirmed that the bank does not possess data specifically detailing festive spending in the country. “Numbers like bank withdrawals, issuance of fresh notes and total inflow of remittances during Ramazan, which could provide insight into consumer activity trends, are not readily available. We do not track festive spending separately,” Ahmed noted.

Qamar Sarwar Abbasi, the Federal Ministry of Finance spokesperson, mentioned he was not aware of any such study within his ministry but assured him after consulting with colleagues. Meanwhile, Afaq Ahmed Qureshi, spokesperson for the FBR, was approached for comment, but a response was pending at the time of filing the report.

Published in Dawn, The Business and Finance Weekly, April 8th, 2024