Pakistan Salary Hikes Controversy 2025

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Pakistan’s Controversial Salary Hikes Amid Economic Crisis: A Political Bribe or Necessary Adjustment?

Pakistan salary hikes controversy 2025, although country finds itself at a crossroads where economic hardship and political maneuvering collide in a spectacle that has left citizens both bewildered and outraged. In 2025, amid soaring inflation, rising poverty, and IMF bailouts, the government approved jaw-dropping salary hikes—up to 500%—for top officials including the National Assembly Speaker, Senate Chairman, MNAs, MPAs, and NEPRA regulators. This move has sparked a fierce debate: Are these raises a justified adjustment or a cynical political bribe to secure loyalty amid a legitimacy crisis?

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Pakistan’s Controversial Salary Hikes Amid Economic Crisis: A Political Bribe or Necessary Adjustment?

Pakistan’s Economy: A Tale of Two Regimes (and a Pandemic)

If Pakistan’s economy were a cricket match, the past six years would be a rain-interrupted Test—full of abrupt starts, unexpected wickets, and the crowd (read: public) never quite sure whether to cheer or groan. Let’s take a walk down this pitch, comparing the three-year innings of Imran Khan’s PTI government (2018–2021) with the most recent three years under the PDM/PML-N-led regimes (2022–2025). We’ll keep it light, but don’t worry: there’s plenty of hard data, a dash of humor, and a few pop culture references along the way.

GDP Growth: Boom, Bust, and a Bit of Both

Imran Khan’s era started with high hopes and even higher IMF conditions. Despite COVID-19 crashing the global party in early 2020, Pakistan’s GDP growth saw wild swings. The second quarter of 2020 was a disaster, with GDP plummeting by 8%. But in a plot twist worthy of a Bollywood thriller, the economy rebounded to a record 12.1% growth in Q2 2021—thanks, in part, to the low base effect and pent-up post-lockdown demand1. Over his three years, average growth hovered around 3–4%16.

Fast forward to the present regime: the past three years have been less dramatic but not exactly a box office hit. GDP growth averaged just 0.3% in the first year, with a recent uptick to 2.4% in early 2025, driven mostly by services and a modest recovery in agriculture. Industry, however, has been the economy’s underperforming batsman, shrinking by 1.1% recently16.

Foreign Direct Investment (FDI): The Elusive Boundary

FDI in Pakistan is a bit like the country’s national football team—there’s potential, but the results are often disappointing. Under Imran Khan, FDI initially trended upward, buoyed by Chinese investment in CPEC projects. But COVID-19 and global uncertainty led to a 30% drop in FDI by 2021, with net inflows falling from $1.85 billion to $1.3 billion in the first eight months of FY212. China remained the main sponsor, with the power sector hogging most of the limelight2.

The current regime hasn’t fared much better. FDI remains tepid, with investors wary of political instability and economic headwinds. The need for a more welcoming business environment is as obvious as the need for a new script in Pakistani soap operas6.

Unemployment: The Numbers Game

Let’s talk jobs. By June 2021, the number of employed Pakistanis had risen to 67.3 million, up from 61.7 million in 2018. Sounds impressive, right? But here’s the catch: the official unemployment rate actually increased from 5.8% to 6.3% during Imran Khan’s tenure36.

Under the current regime, unemployment has climbed further to 8.5%. The job market feels a bit like Karachi’s traffic: crowded, confusing, and not for the faint of heart6.

Poverty: The Line Keeps Moving

Poverty lines are like the Wi-Fi at a government office—forever shifting and rarely where you need them. The World Bank’s recent update, using a higher $3/day threshold, now puts 45% of Pakistanis below the poverty line, up from 39.8% using the older $3.65/day standard46. Under Imran Khan, the poverty rate was estimated at 37.2%, rising to 35.7% under the current regime (using older definitions)6. The real kicker? Extreme poverty (the lowest rung) has jumped to 16.5%4.

Foreign Reserves: The Rollercoaster Ride

Foreign reserves tell their own story. Under Imran Khan, reserves hit a three-year high of $13 billion in 2020, thanks in part to strong remittances and a rare current account surplus5. But the good times didn’t last. The present regime inherited a dwindling reserve pile, which at one point dipped as low as $3 billion—barely enough to cover a few weeks of imports6.

Inflation: The Uninvited Guest

If there’s one thing Pakistanis agree on, it’s that everything costs more—much more. Under Imran Khan, inflation averaged 13.4%, with energy and food prices leading the charge6. The current regime, despite all efforts, has seen inflation soar to a staggering 36.4%. Electricity, gas, and transport charges have become the villains in every dinner table conversation6. The cost of living crisis is so acute, even the “chai wala” jokes aren’t funny anymore.

Utility Prices and Cost of Living: The Not-So-Funny Side

Remember when electricity bills were just annoying? Now, they’re terrifying. Both regimes have struggled to rein in utility prices. Subsidy cuts (thanks, IMF), currency devaluation, and rising global energy prices have meant that electricity, gas, and transport costs have skyrocketed. For many, paying the monthly bill now feels like a game of Russian roulette.

Migration of Industries and Brain Drain: The Great Escape

With unemployment high and economic prospects dim, many skilled professionals and businesses are packing their bags. The “brain drain” is real—doctors, engineers, and IT professionals are seeking greener pastures abroad. Even small industries are relocating to friendlier markets, citing high costs and regulatory headaches. It’s a bit like everyone leaving the cinema before the movie ends—except the popcorn here costs three times as much.

Quick Comparison Table

Indicator	Imran Khan (2018–21)	Present Regime (2022–25)
GDP Growth (avg)	~3–4%	0.3–2.4%
FDI (annual, $bn)	$1.3–2.0	$1–1.5 (est.)
Unemployment Rate	6.3%	8.5%
Poverty Rate	37.2%	35.7–45%
Foreign Reserves ($bn)	13 (peak)	3–9.6
Inflation	13.4%	36.4%
Utility/Transport Prices	High, rising	Even higher
Industry/Brain Drain	Rising	Accelerated

1 2 3 4 5 6

Final Thoughts: Lessons from the Pitch

So, what’s the takeaway? Both regimes faced their share of googlies—COVID-19, global shocks, political instability, and the ever-present IMF. Imran Khan’s government brought some fiscal discipline and social programs, but couldn’t tame inflation or unemployment. The current regime has stabilized the ship (barely), but at the cost of growth and with even higher prices.

If you’re a Pakistani trying to make sense of it all, you might feel like you’re stuck in a never-ending episode of “Game of Thrones”—just when you think winter can’t get any worse, it does. Yet, as every cricket fan knows, hope springs eternal. Maybe, just maybe, the next innings will be better.

And if not, at least we’ll have plenty to talk (and meme) about over chai.

Disclaimer: No economists were harmed in the writing of this article, though several did spill their tea reading the latest inflation figures.

The Numbers That Stun

The National Assembly Speaker Ayaz Sadiq and Senate Chairman Yousuf Raza Gillani saw their monthly pay jump from PKR 205,000 to a staggering PKR 1.3 million, effective retroactively from January 1, 20251 45. Members of the National Assembly and Senators were not far behind, with salaries soaring from around PKR 180,000 to PKR 519,000 per month. Cabinet ministers and advisors also received increases of up to 188%, despite repeated government pledges of austerity14.

Meanwhile, the average Pakistani grapples with inflation topping 36%, utility bills skyrocketing, and nearly half the population living under the poverty line1. The contrast is as stark as a luxury car speeding past a rickshaw stuck in traffic.

Economic Context: A Nation Under Strain

Pakistan’s economy remains fragile with a slow GDP growth rate hovering between 0.3% and 2.4% recently, high unemployment nearing 8.5%, and foreign reserves dipping dangerously low[Memory]. Inflation continues to erode purchasing power, pushing basic commodities and utilities beyond the reach of many. The government’s narrative has been one of austerity and belt-tightening, often urging citizens to endure sacrifices as part of a recovery phase supported by IMF bailouts15. The Alarming Reality of Beggary in Pakistan

Yet, the government simultaneously expands its federal cabinet—now 51 members strong, more than double the original size—and rewards itself with lavish pay hikes. This contradiction has fueled public anger and skepticism about the regime’s priorities15.

Political Motives Behind the Pay Raises

The timing and scale of these raises raise serious questions. The current regime faces a legitimacy crisis following the February 2024 elections, widely alleged to have been rigged on a massive scale. With popular support waning and opposition mounting, the government’s hold on power is precarious.

In this light, the salary hikes can be interpreted as a strategic political move—a form of patronage or “political rent” designed to secure the loyalty of key officials and lawmakers whose support is critical to maintaining the regime’s grip on power[Memory]1. By financially incentivizing judges, parliamentary leaders, and regulatory heads, the government aims to prevent defections and dissent within its ranks.

This tactic is not unique to Pakistan; fragile democracies often resort to such measures when electoral legitimacy is questioned. However, the public perceives these moves as blatant self-enrichment at their expense, deepening distrust and social resentment.

Public Outrage: A Nation’s Bitter Response

Citizens, already burdened by inflation, unemployment, and rising utility costs, have reacted with outrage. Many see the raises as a “cruel joke” and a betrayal of public trust. One Islamabad resident lamented, “While the public is told to tighten belts, the government continues to reward itself generously. This is not austerity—it’s hypocrisy”1.

The salary hikes have become a symbol of elite insensitivity and widening inequality, fueling perceptions that the government is out of touch with the struggles of ordinary Pakistanis. This risks exacerbating social unrest and undermining the fragile social fabric.

Worsening Inequality: The massive pay gap between officials and the average citizen deepens social divides and undermines social cohesion.

Eroding Trust: Public trust in institutions and leadership suffers, weakening governance and democratic legitimacy.
Inflationary Pressures: Large wage increases at the top can contribute to inflationary spirals, further hurting low-income groups.
Brain Drain and Industry Migration: Economic instability and perceived corruption encourage skilled workers and industries to seek opportunities abroad, weakening Pakistan’s economic potential.

Large pay hikes for top officials amid Pakistan’s ongoing economic instability risk significantly worsening social inequality and fueling unrest. Here’s why:

1. Exacerbating Income Inequality
The recent salary increases—up to 500% for key lawmakers and substantial raises for other officials—have dramatically widened the already yawning gap between the highest earners and the average citizen. For example, National Assembly Speaker and Senate Chairman salaries jumped from PKR 205,000 to PKR 1.3 million monthly1. Meanwhile, about 50% of Pakistan’s population lives under the poverty line, struggling with soaring inflation and utility costs. This stark disparity deepens feelings of injustice and exclusion, as the rich get richer while the poor see no relief3.

2. Undermining Social Cohesion and Trust
When citizens witness political elites awarding themselves lavish pay raises during economic hardship, it erodes trust in government institutions and leadership. Public anger is already boiling over due to inflation, unemployment, and austerity measures. These salary hikes, perceived as tone-deaf and self-serving, can act as a catalyst for social unrest, protests, and political instability17. People ask: “If those in power can afford such luxuries, why can’t we?”

3. Fueling Perceptions of Corruption and Nepotism
Large, sudden salary increases without transparent justification can reinforce perceptions of corruption and cronyism. Studies show that uneven or arbitrary pay raises can breed resentment and suspicions of favoritism, which undermine governance and public service delivery2. This perception alone can destabilize social order by fostering cynicism and disengagement.

4. Impact on Economic Stability
Growing pay gaps can demotivate lower-income workers and public servants, leading to reduced productivity, higher turnover, and brain drain as skilled workers seek better opportunities abroad or in the private sector3. This weakens the government’s capacity to manage economic challenges effectively, creating a vicious cycle of instability.

5. Historical and Global Lessons
The IMF and other experts warn that unchecked inequality and perceived unfairness in income distribution are key drivers of social unrest worldwide7. Pakistan’s current trajectory, with massive pay hikes for officials amid widespread poverty, fits this pattern and raises red flags for future instability.

In summary:

Massive salary hikes for officials during economic turmoil are more than just poor optics—they risk deepening social inequality, eroding trust in institutions, and sparking unrest. Without measures to address these disparities and restore public confidence, Pakistan’s fragile economic and social fabric could face further strain.

Can Such Raises Ever Be Justified?

While officials argue that pay must keep pace with inflation and align with provincial parity, the scale and timing of these hikes are widely regarded as unjustifiable. Modest, transparent adjustments to attract and retain talent are one thing; sudden, massive raises amid economic crisis and public suffering are quite another.

Why Such Pay Hikes Are Hard to Justify

Economic Hardship and Poverty: Nearly half of Pakistan’s population lives below the poverty line, grappling with soaring inflation, unemployment, and rising utility costs. In this environment, massive salary increases for top officials—up to 500% in some cases—appear deeply insensitive and disconnected from the realities faced by ordinary citizens.
Inflation and Cost of Living: While officials argue that their salaries must keep pace with inflation and cost of living increases, such large hikes risk fueling a wage-price spiral. Historical and IMF research shows that large wage increases during inflationary periods can lead to further price hikes, worsening the cost of living for everyone, especially low-income groups6.
Economic Growth and Inequality: Raising wages for the wealthy elite does little to stimulate broad-based economic growth. Unlike minimum wage increases, which can boost consumer spending among low-income workers and reduce poverty1 3 5, salary hikes for top officials concentrate wealth further and do not translate into increased demand or economic activity at the grassroots level.
Public Trust and Social Stability: These raises undermine public trust in government and can exacerbate social inequality and unrest. When leaders reward themselves lavishly amid austerity for the masses, it fuels perceptions of corruption and injustice, which can destabilize the social fabric.

Conclusion: A Dangerous Game of Political Survival

Pakistan’s salary hike saga is more than a fiscal policy issue—it’s a window into the country’s political soul. The government’s decision to lavishly reward itself during economic hardship reflects a regime prioritizing political survival over public welfare. While it may temporarily secure elite loyalty, it risks deepening social inequality, eroding trust, and igniting unrest.

For Pakistan to navigate out of its crisis, it must bridge the growing divide between rulers and the ruled, restore credibility through transparency, and focus on policies that uplift the majority rather than enrich a few.

References

Economic Times, “Pakistani govt raises salaries of NA speaker, Senate chairman to 1.3 million,” June 7, 2025.
Aik News HD, “Budget 2025-26: Govt considers up to 30% allowance hike and 10% salary increase,” June 6, 2025.
Yes Punjab, “Sharif govt gives 500% salary hike to NA Speaker, Senate Chairman,” June 7, 2025.
Pakistan Today, “Nepra limits access to sensitive documents after unauthorized salary hikes,” April 16, 2025.
Memory entries on Pakistan’s economic indicators and political context, 2025.

This article aims to provide an insightful, balanced analysis of Pakistan’s controversial salaryhikes amid economic and political turmoil, blending data with nuanced perspectives and public sentiment.