akistan’s economic debate is usually framed through a familiar set of macroeconomic indicators — GDP growth, inflation, fiscal deficits and external balances. These numbers dominate headlines and policy discussions, yet they offer only a partial view of economic reality. To understand how growth, fiscal adjustment and inflation are actually experienced, one must look beyond aggregates and into households.

The Household Integrated Economic Survey does exactly that. Its latest findings arrive at a moment when the economy is showing early signs of macroeconomic stabilisation, following a series of politically difficult reforms. The government has rightly pointed to unsustainable trade deficits and a crippling circular debt as existential threats.

Measures, such as withdrawing energy subsidies, managing imports and adjusting tariffs were undeniably painful, but they were aimed at averting a deeper crisis. The recent quarterly GDP growth of 3.71 percent, led by a rebound in industry, is cited as early evidence that this bitter medicine may be working.

Yet the HIES tells the other, indispensable half of the story. The central question today is not whether stabilisation was necessary — it was — but whether that stabilisation can now be converted into household resilience and productivity. Stability achieved through household compression is inherently fragile. Durable prosperity requires that this hard-won stability translate into stronger incomes, skills and opportunities at the household level.

The survey highlights a striking paradox. Pakistan is now among the most digitally connected societies in the region. Almost every household owns a mobile phone and nearly 70 percent have internet access. In theory, such connectivity should have accelerated employment, mobility and inclusion. Yet progress on these fronts has been limited. Male employment has declined and household vulnerability has increased. The explanation lies not in technology itself, but in the economic pressures households have absorbed during the adjustment phase.

HIES data quantifies this pressure with clarity: while average household incomes rose by 97 percent, expenditures increased by 113 percent. This gap was not driven by discretionary consumption, but by unavoidable costs.

To address circular debt, electricity tariffs were raised sharply — from around Rs 18 to Rs 27 per unit. The HIES confirms the consequence: the share of household budgets spent on electricity and gas rose by about two percentage points. Health expenditures also claimed a growing share.

Households adjusted by necessity, not choice. The most troubling evidence appears in the food basket. While the share of spending on food increased, the per-capita quantity consumed of essential staples — wheat, flour, rice and pulses — actually declined. Families are paying more to eat less and of lower quality. This trade-off, made to keep the lights on and manage health expenses, quietly erodes human capital and undermines future productivity.

This helps explain why past periods of headline growth failed to produce broad-based improvements in living standards. HIES reveals increasing downward mobility, particularly among lower-middle-income households — too “rich” to qualify for social protection, yet too insecure to absorb repeated shocks. Over time, this weakens resilience and erodes trust in economic policy.

Another sobering insight is that employment alone no longer guarantees stability. A growing share of employed individuals now belongs to financially stressed households. Low-productivity jobs and stagnant real wages have weakened the traditional link between having a job and living securely.

This is where the digital paradox becomes clearer. Connectivity helped households cope — by managing bills, accessing information and navigating daily pressures — but coping is not the same as earning.

Pakistan’s experience shows that digital access, by itself, cannot offset structural economic pressure. Without pathways to digital work, online services, or e-commerce, the internet remains a convenience rather than a source of livelihoods.

The policy lesson is not that stabilisation failed — it was necessary and unavoidable. The lesson is that stabilisation is incomplete without a second phase focused on opportunity creation. Pakistan has connected its people and, for now, stabilised its macros. The critical pivot must now be from expanding access to creating digital livelihoods.

This means building platforms for online work, freelancing and services exports; linking skills training to real market demand; enabling small and informal firms to adopt digital tools for sales, payments, and finance; and supporting digital trade and e-commerce for domestic and regional markets.

HIES is not just a diagnostic tool; it is a guide for the next, more difficult phase of policy. It shows where adjustment pressures fell and what trade-offs households were forced to make. The central question now is straightforward: What is this hard-won stability for?

If it merely precedes another cycle of imbalance and compression, then the sacrifices households made will have been fruitless. To be sustainable, strategy must shift from compressing household consumption to expanding productivity across the economy.

That implies difficult — but necessary — choices: prioritising efficiency and loss reduction in energy and state-owned enterprises over repeated cost pass-throughs; broadening the direct tax base rather than relying disproportionately on consumption taxes; protecting human capital spending even during stabilization phases; and reallocating fiscal space toward skills, technology adoption and small enterprise growth.

These technical reforms require political courage to confront inefficiencies and rents beyond households — courage equal to that shown in withdrawing subsidies.

The HIES ultimately tells us that Pakistan’s economy — and its people — are more adaptive than often assumed. But adaptation has limits. Households have financed stability by cutting back on nutrition, education and investment in their own futures.

The policy task ahead is, therefore, clear. Pakistan must convert its digital reach into productive opportunity, its workforce into skilled contributors and its stabilisation into inclusive growth.

The untold story in the HIES is a story of immense, quiet sacrifice — and a wake-up call. That sacrifice has purchased a narrow window of stability, but that window will close unless policy now pivots, decisively and deliberately, from extracting resilience from households to investing in their potential. The worst of the adjustment may be over. The task now is to ensure it was not in vain.

The writer is the vice chancellor of the Pakistan Institute of Development Economics and a member of the Planning Commission of Pakistan