Pakistan’s savings rate has dropped to its lowest level in nearly 30 years. According to a recent report by the Pakistan Institute of Development Economics (PIDE), people are now saving only Rs 6 out of every Rs 100 they earn. The national savings rate currently stands at just 6.4%.
This is much lower than regional countries. India saves around 28%, Bangladesh 21%, and Vietnam about 30%. Economists warn that such low savings hurt the country badly. It limits money available for local investment, forces more borrowing from abroad, and slows down long-term economic growth.
High inflation is the main reason. People spend most of their income on daily needs like food, rent, and fuel. Low returns on bank savings and National Savings schemes also discourage people from saving. Many prefer to spend or invest in gold, property, or foreign currency instead.
Experts suggest several solutions. The government should improve incentives for savers, expand easy digital savings options, and run a national campaign to promote financial planning. Better banking services and higher real returns on deposits can help bring the savings rate up.
Strong domestic savings are important for a stable and growing economy. Without them, Pakistan will continue depending on foreign loans. Quick steps by policymakers can reverse this worrying trend and support a brighter economic future.
