Pakistan: Hit By Acute Economic Crisis, Shehbaz Sharif Govt To Adopt Austerity Drive, Says Report

Facing an acute economic crisis, Pakistani Prime Minister Shehbaz Sharif has announced a new austerity drive to cut down on government expenses. The drive aims to reduce all federal expenses by 15%.

Pakistani Prime Minister Shehbaz Sharif has announced a new austerity drive to cut down on government expenses.

Pakistani Prime Minister Shehbaz Sharif has announced a new austerity drive which will save the government 200 billion rupees ($766 million) per year. The measures, which come as Islamabad is seeking a deal with the International Monetary Fund (IMF) to secure $1 billion in funding, include cutting back allowances and travel expenses for ministers and advisers. In addition, all federal ministries and government offices will be required to reduce their expenditure by 15%, reported news agency Reuters.

To achieve these savings, Sharif has asked ministers and advisors to give up their salaries, allowances, luxury cars, foreign trips and business class travel. The austerity measures have been voluntarily agreed to by the ministers, and will also require them to pay their own utility bills, return all luxury vehicles (which will be auctioned), and travel in economy class for both domestic and foreign trips. The number of security vehicles provided to each minister will also be reduced to one, and ministers will not be permitted to stay in five-star hotels during foreign visits.

Other measures include a ban on purchasing luxury items and all types of vehicles until June 2024, according to Reuters. All divisions, departments, subordinates, and other government entities under the federal government will also be required to reduce their current expenditure by 15%. These stringent measures are part of the requirements the IMF has asked Pakistan to fulfil before finalizing a deal, with talks between Pakistan and the IMF due to conclude this week.

The IMF has asked Pakistan to take a host of prior actions, which included withdrawing subsidies, hiking energy tariffs, and raising extra revenues. Sharif stated that the South Asian nation hopes to secure funds from the IMF soon, and that the austerity measures are in line with the requirements laid out by the lender.

Pakistan is currently facing a balance of payment crisis and is seeking to secure funding from the IMF to address its economic challenges. The new austerity measures are part of the government's efforts to reduce spending and boost its financial stability, with the hope that the measures will help Pakistan to achieve its economic goals in the coming years.