Wars, heightened security concerns in public spaces, fewer overseas Pakistanis arriving due to flight disruptions, tighter household budgets, calls for a simpler Eid amid the Iran situation, all combine to dampen the expected expansion in Pakistan’s Eid economy this year.

Together, these factors have reinforced a more cautious consumer mindset, with households postponing non-essential purchases and prioritising basic needs, consistent with global evidence that geopolitical tensions and economic uncertainty reduce consumer confidence and discretionary spending.

Eid spending this year is estimated to reach around Rs420 billion, marking a nominal increase of about 10 per cent from last year’s Rs380bn, as per the author’s calculations. However, real growth appears more modest when adjusted for inflation, which the State Bank reported at 7pc in February.

Ordinary Pakistanis appear to have driven this expansion despite modest Eid budgets, largely due to their sheer numbers. This segment, around 24 million households, accounts for more than half of total consumer spending and relies heavily on the more affordable informal market for essentials such as garments, children’s wear, shoes and accessories.

‘You can’t expect a strong celebratory mood amid geopolitical tensions and prevailing uncertainty’

Their collective spending, typically over half of the total Eid spend, helped offset weaker demand from higher-income groups and a notable slowdown in the online market. Local brands that expanded their footprint through additional outlets and adapted designs to shifting consumer preferences performed relatively better, though many were compelled to trim margins to retain their consumer base.

A business leader estimated that low-income households, earning between Rs60,000 to Rs80,000 a month, typically allocate an Eid budget roughly equal to one month’s income.

An analyst, however, disputed this view, arguing that most low-income families struggle to make ends meet and lack the capacity to save. “It is unrealistic to assume that households already slipping into debt each month can build savings for Eid,” he said. “They do manage to celebrate, but largely by borrowing, taking salary advances or bonuses, or relying on support from relatives, friends, or philanthropic sources.”

“It is true that many families who can afford to shop only once a year wait for Eid to indulge. Lacking the privilege of buying on a whim, they plan carefully to celebrate the festival. For them, it is often less a choice and more a compulsion,” noted a marketing executive.

Ziad Bashir, Executive Director of Gul Ahmed Textile Mills, broadly endorsed these observations. “You can’t expect a strong celebratory mood amid geopolitical tensions and prevailing uncertainty. With so much death and destruction in the region, even I don’t feel like celebrating,” he said.

He noted that most companies, including major local brands such as Khadi, Nishat, and Service, reported relatively sluggish business this year. “Higher prices may have lifted turnover, but volumes have generally declined,” he added. On average, prices of branded products have risen by 12–15pc this year.

He believes that the informal sector captured a larger-than-usual share of business due to lower prices. “The economy has been under strain for too long, and everyone is feeling the pinch. Consumers have not only scaled back on higher-quality products, but many have also switched entirely to cheaper alternatives,” he said.

He warned that businesses expect a sharp drop in demand and profitability after Eid as the broader impact of the current challenges becomes more evident. “Higher energy costs, supply-chain disruptions, and uncertainty in export markets will play out over time. One can hope and pray for an end to conflicts and for better sense to prevail,” he added.

Leaders of Karachi’s local markets, including Atiq Mir, Nasir Gaddi and Samad Khan, largely attributed the subdued business activity to the erosion of consumer buying power above all other factors.

Key corporate leaders in Punjab echoed Ziad Bashir’s concerns. Reflecting on the post-Eid outlook, they warned of challenges in importing essential raw materials at viable rates.

“Existing inventory has largely been exhausted in meeting Eid demand. Replenishing could become difficult amid rising prices and disrupted supply chains. Passing this cost on to consumers would further erode our customer base, while export headwinds limit our ability to cross-subsidise the domestic market. We can already feel the pressure building,” said a leading businessman.

The impact was uneven across sectors, with personal care services and tailors hit hardest. High-end salons reported business falling by up to 50pc of projections. “We usually hire extra staff for Eid, but this year even regular employees were underutilised,” said a salon manager. Beauticians also noted that the absence of overseas Pakistani families, traditionally big spenders, significantly reduced demand for premium, full-service packages.

The State Bank was approached for data on cash withdrawals, remittance inflows and the volume of fresh currency issued for Eid, but its response was awaited at the time of filing. A central bank source, however, pointed to a sharp shift in currency demand. “Demand for Rs100 notes increased, while it dropped significantly for Rs50, Rs20 and Rs10 denominations, largely reflecting the impact of inflation,” he said.

The government, including key economic ministries, has yet to prioritise systematic measurements of Eid-inspired consumption and evolving market trends. Sources in Islamabad confirmed that neither the finance nor the planning ministries maintain such data nor are actively working to develop it. The Pakistan Bureau of Statistics also does not track Eid-specific spending.

The figures cited above should be seen as indicative rather than definitive. They are based on the author’s earlier estimates, using simple, back-of-the-envelope calculations rather than a comprehensive dataset on consumer spending. While some private-market analytics firms may have produced more rigorous assessments for their clients, these estimates are not publicly available.

Published in Dawn, The Business and Finance Weekly, March 23rd, 2026