As Eid draws closer, the festive atmosphere is picking up heat. Malls and old city markets have set up special displays as shoppers haggle to secure the right deal during final rounds of their trips to bazaars.
Rush in markets all over the country is said to be increasing, an informal survey by Dawn reporters in major cities indicated. The jail breaks, bombings, shootings and security risk at markets generate anxieties but not strong enough to dissuade people from celebrating the festival in a befitting fashion, the sharp spike in business activity suggests.
“Yes, terrorists can break jails but not spirits of people who have learned to live with pain”, says shop owner Shahid Abbas at an upscale market in Karachi, during a visit to the mall bustling with activity a day after DI Khan incident.
“If the government and the security apparatus fail at their job why would I punish my family for that? I will do all in my means to buy them whatever makes them enjoy the festival”, Adil Safi, an engineer shopping with his family of five at a bazaar retorted when pressed for comment with reference to security environment in the country.
Little wonders that the Eid market swelled in 2013 to whopping Rs700 billion up from Rs600 billion in 2012. The figure is based on estimates of additional spending during Ramazan, the holy month leading up to Eid.
A jump of 16.6 per cent of the sales when the average GDP growth rate hovers around four per cent, inflation is eight per cent, unemployment is high and wages are frozen generally except for the government employees.
The government has been increasing wages at the rate of 10-15 per cent annually for the past half decade. Government employees, however, constitute a small percentage of the working population. Beside employment in the private sector, a huge chunk is self employed or works in the informal sector.
The aggregate data is not available; anecdotal evidence, however, suggests that family income in cities and towns has consistently been increasing, though not drastically, over the past decade.
“To close the gap between higher income aspirations and means to fulfil additional demand in a TV-watching-cell phone-using nation, families have strategised to improve the quality of life. Either more people earn or a single earner does multiple jobs”.
“It becomes a do-or-die situation at Eid. On this festival people beg, borrow or steal but they make sure that each family member gets something new to feel happy about”, an economist who monitors markets closely commented.
A banker, however, expressed reservations. He thought the rise in spending is primarily induced by the assumption of the new government that has kindled hope of economic revival. It has boosted the confidence of businesses and consumers.
“More than an increase in income and assets of a family the rise in spending this year on Eid reflects the confidence of people in the newly installed Nawaz Sharif government”, concurs a financial analyst.
“We have developed a survey reflecting consumer sentiments in several hundred markets across the country. The results points to a major shift upward in consumption level reflecting rise in consumer confidence against risks in the country. The survey will be made public soon”, a source in the State Bank says.
“People are feeling better because they expect a pickup in the economy to improve”, he explains.“Business sentiment soared sharply from minus 34 per cent in August 2012 to plus two per cent in July 2013, following a smooth transition of the government” the seventh edition of Business Confidence Index survey sponsored by Overseas Chamber of Commerce and Industry reveals.
It is pertinent to explain the basis for arriving at Rs700 billion figure for Eidul Fitr economy in absence of consolidated records of transactions.
It is actually based on the estimates of Eid sales/purchases, supported by the data of cash withdrawals from banks by depositors, remittances inflows and the declaration of the amount of fresh notes issued by the State Bank to honour the rising market demand of the people.
Our sources in the financial sector informed that cash withdrawals increased to Rs250 billion in Ramazan in 2013 from Rs200 billion in 2012 and Rs170 billion in 2011.
The spending capacity of families particularly in rural Pakistan gets a boost by inflow of remittances. Overseas Pakistanis send money to their relatives to help them cover their Eid expenses.
One can get some clue to the size of the economy from the State Bank’s declaration of total value of fresh notes issued in the month of Ramazan.
Last year SBP issued Rs123 billion worth of new notes that SBP insiders believe may get close to Rs150 billion this year. People like to use new notes for Eidi (gift money distributed on Eid by individuals amongst their younger relatives and employees). The leaders of trading associations told Dawn that business during the current year is better than before.