There was record spending this year during the Eidul Fitr in Pakistan as consumer spending on this auspicious occasion has crossed the rupee one trillion mark with a raise of around 15 percent to the preceding year. Many analysts see this positive change witnessed due to factors of improvement in political, social and economic front as despite the boiling heat spell especially in Karachi people made much of the time for Eid shopping. Consumers confidence is developing now with people are more aware of budget concept due to the growth of internet and television advertisements, say analysts.
As Eidul Fitr falls after the end of holy month of Ramazan, the healthy shopping spree include purchasing cloths and household items whereas visiting the relatives, eating out, visit to parks and playgrounds and giving Eidi (money – gift given by elder relatives and family friends) etc. Pakistanis celebrated this year Eid like never before, all across the country, despite successive heat waves, people thronged the market to boost the Eid economy by about 15 percent, crossing the trillion rupee mark.
The State Bank of Pakistan (SBP) has confirmed disbursing Rs350 billion worth of new notes generally used as a cash gift at the holy festival. The projection of Rs1.1 trillion as a volume of the Eid economy is based on the data provided by the State Bank of Pakistan and the Federal Bureau of Statistics. These include: cash withdrawals by private account holders from banks, fresh notes issued on peoples’ demand, the official and unofficial flow of remittances from overseas Pakistanis and scores on the consumer’s confidence index. Commercial bankers confirmed massive withdrawals by account holders before Eid.
The spike in spending is attributed to a combination of economic, social and political factors. An analyst said irrespective of salaries not rising, an increase in family income has been witnessed and now the concept of a single earning member has been replaced by several earners in households. “Even where salaries are static family income has consistently been increasing. One- job, one- earner households are replaced by multiple- jobs, several- earners households. Those better informed (thanks to internet and television) budget more skilfully to create the financial space needed to indulge on special occasions.”Expectations of a smooth transition of power and improved security situation has provided comfort, dulled collective anxiety and mobilised Pakistanis to take a calculated risk for pleasure,” an analyst commented.
During Eid, most Pakistani particularly lower middle class, the concentration is on food items, entertainment centers that include a visit to the zoo or a movie theatre. Spending during Eid increased substantially. This is not a good sign in a country where saving for the future is very much low. This is a source of serious concern to the planners in our country.
Pakistan’s total private sector consumption was 28.244 trillion rupees in 2017-18 as per the provisional estimates according to the Economic Survey 2017-18 with total Gross Domestic Product (GDP) at market prices estimated at 34.39 trillion rupees which is an enormous 81 percent of the total Gross Domestic Product for the year.
In this context the capacity of Pakistani households to save for future and for the government to be able to tap the country’s savings to meet its social and physical which is at no cost, is severely compromised.
It is utmost necessary that the next elected government to focus on increase savings on the raising the rate of return on national saving schemes, but on raising employment opportunities as well as incomes at a speedier pace in the private sector relative to the rate of inflation.
The so called improved security situation encouraged Pakistanis to take risk for delight and enjoyment. Groups of people of all ages and classes enjoy a good time in Eid bazaars. Buyer enthusiasm was not limited to in-shop purchasing. Online shopping also made records, according to bankers and fintech experts. The rush on the roads and in shopping areas is assumed that Pakistan is prosperous but actually it is all false and showy.
The densely populated Pakistan chokes roads and causes traffic jams in shopping areas prior to Eid. Seeing some joy in their hearts the sober people seeks some comfort in their heart. Pakistan spends Rs175 billion in the holy month for philanthropic giving. As far as charity is concerned Pakistan occupies a second place in the world.
Remittances this year are said to be better than last year. During Ramazan inflows increase the average. It must be remembered that overseas Pakistanis sent into the Eid economy of Pakistan through informal sources.
Traders in the Karachi city have fixed a sales target of Rs60 billion for this Eidul Fitr shopping. This rose from Rs 40 billion in 2017 and Rs 50 billion in 2016. In the last five years, highest sales of Rs70 billion were witnessed in 2015 in Karachi.
Traders said during the day due to the scorching heat wave and humidity kept buyers away from the markets. Buyers prefer arriving in markets after Iftar. Eid shopping gained momentum despite harsh weather in the provincial capital Lahore. All the markets and shopping malls were attired in colorful lights, while makeshift stalls selling glass bangles and henna dominates every corner. The harsh weather did not to stop citizens from shopping during the daytime. After Iftar, people flooded markets on shopping sprees.
Eid is the biggest national and religious festival in Pakistan, where everybody buys new clothes and shoes for their families. Countless stalls were set up in Liberty Market, Anarkali Bazaar, Mall Road, Madina Market and other bazaars; remained open until Sehr due to the mass influx of customers. Some even trekked all the way from rural areas to the provincial capital in order to partake in the Eid festivities. People travelled all the way from their hometown in order to buy new clothes for his family.
Despite the fact that many shops and brands offered discounts and boasting of sales, some citizens still complained about inflated prices. During the last decade, hundreds of garment and shoe stores have opened up in Lahore. This prompted local product manufacturers to increase their prices. People from middle income groups, such cannot afford branded garments. Instead, buy locally made products that are not only good quality but also within the pocket.
Well-to-do people do spend heavily on Eid from Rs10,000-15,000 per person. Devaluation of the rupee against the dollar and other factors had pushed up prices of various items. The price of ladies and gents unstitched and stitched garments increased by five per cent in the last one year.
Though there hasn’t been a significant rise in salaries both in the government or private sector, people still spent a lot of money on Eid because there is now an increase in total family income where single breadwinner of one home has been replaced by several breadwinners.
Another factor that seems to be playing a major role in increased spending is better awareness through social media and television which has allowed people to come up with a better budget for Eid spending. Pakistan now has multi-floored malls across all major cities that providing a safe, secure and air-conditioned environment for shopping for people. Pakistanis now have overall better buying power and they no longer go out for shopping with empty pockets.