Cash-strapped Pakistan announces austerity measures as soaring energy cost, inflation bite hard

Cash-strapped Pakistan, which is looking for ways to rein in inflation and save electricity, has announced a series of austerity measures to tackle the nationwide fuel crisis.

Among the significant measures were the curtailment of overseas trips for officials, fuel quotas for government employees to be cut by 40 per cent, and reimposing five-day workweek.

The move comes at a time when the South Asian country is hit by hours-long power outages, with demand outstripping supply during the peak summer months. Soaring global fuel prices have also increased pressure on the external account and the local currency has hit record lows against the dollar.

Apart from that, announcements were made to stop purchases of new vehicles for use by officials and appliances such as air conditioners.

Speaking to reporters, Information Minister Marriyum Aurangzeb said the nation is aiming to lower energy consumption at government offices by 10 per cent.

Lunches, dinners and high teas will no longer be served to officials, and the government will also consider making Friday a mandatory work-from-home day for its employees.

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Aurangzeb said Prime Minister Shehbaz Sharif had formed a committee to determine how “efficiency is not affected” and how the government “may benefit from it in an effective manner”.

Discussions are being carried out with to switch off streetlights on alternate days.

“A complete ban has been imposed on official visits by government officials, functionaries and ministries. Only obligatory visits and very important bilateral visits will be allowed,” she said, adding that a committee would decide the importance of each visit before giving approval.

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Aurangzeb said there was currently a gap of 4,600 megawatts between supply and demand, with supply at 21,000 megawatts and demand at 25,600 megawatts.

In the wake of soaring energy prices, Pakistan is facing a balance of payment crisis with forex reserves falling below $10 billion, enough for around 45 days of imports, as well as double-digit inflation.

(With inputs from agencies)

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