Pakistan is facing a critical economic crisis, resulting in the highest inflation rate of 31.5% in the past decade. This inflation has led to a significant decline in Tech Industry and purchasing power and a reduction in the standard of living. Business closures have increased the unemployment rate from 6.3% to 9.1%, exacerbating the crisis.
• Pakistan’s Economic Crisis and Its Impact on the Tech Industry
• Imported Technology Devices in Pakistan: A Victim of Inflation
• Technology Shortages and Price Hikes in Pakistan
• Laptops and PCs in Pakistan: Shortages and High Prices
• Mobile Phone Market in Pakistan: A Saturation of 66% Due to Inflation
The inflationary pressure has also affected the youth’s ability to learn and acquire skills as they focus more on earning a living and supporting their families. Consequently, the lower-middle-class and lower-class have lost 30% of their purchasing power in the past four years.
Several sectors of the economy are struggling, and many are resorting to temporary shutdowns, job cuts, or cost-saving measures. The technology sector, in particular, has been directly affected by the general price rise.
Almost all technological devices, including smartphones, laptops, smartwatches, smart TVs, and tablet PCs, are imported into Pakistan because of its import-heavy economy.
Imported items have faced higher price hikes than local items due to the sharp increase in inflation, rapid depreciation of the rupee against the dollar, and taxes.
Recently, the Federal Govt set import restrictions, and traders struggled to open letters of credit (LCs). This has created a shortage of technology items in Pakistan, further propping their prices due to the demand-supply dynamics.
As a result, the prices of tech items have skyrocketed in Pakistan. With imported smartphones, there is an added cost of PTA verification. The laptop market has also faced problems as only select brands are available.
With many Pakistani companies still implementing hybrid or work-from-home models, consumers find replacing their laptops or PCs with newer ones difficult. Compared to 2019, laptop rates have more than doubled, and few components of PCs are being sold for significantly higher prices.
This whole scenario has impacted the sales of mobile phones and has led to an increase in prices. According to statistics shared by Priceoye.pk and zaincheema.com, the mobile phone market witnessed a saturation of 66% due to these problems.
Existing shop owners are facing two-faceted problems as they cannot secure a supply of products and are combating rising rents, electricity, utility, and other costs associated with running shops.
Inflation leads to a declining standard of living, resulting in a worse public health crisis. The inflation rate in the health sector in December 2022 stood at 13.50%, compounding the mental health concerns due to economic crises and unemployment.
The government should control the rapid rise in prices by enhancing the capacity of the price control cells and district management. In the long run, the government must resort to long-term economic policies that promote sustainable economic growth.
Streamlining the supply chains and ensuring social safety nets for vulnerable segments of society is critical. A multidisciplinary study linking inflation with mental health is necessary, as the psychological impacts of inflation are least studied.