Pakistan likely to cut 10 % salaries amid looming economic crisis

Amid growing economic crisis in cash-strapped Pakistan, different proposal are being considered including 10 % salary cut of government employees across the board.

Pakistan is grappling with one of the country’s worst economic crises in recent years amid dwindling foreign exchange reserves.  

As per the reports of Geo news, The National Austerity Committee (NAC) — constituted by Prime Minister Shehbaz Sharif — is considering different measures, including cutting down the salaries of government employees by 10 per cent across the board.

The expenditures of ministries/divisions are also considered to be cut down by 15 % by NAC which will also further reduce the number of federal ministers, ministers of state and advisers from 78 to 30 only while the remaining ones to work on a pro bono basis, the report further said. The recommendations would be finalised on Wednesday and the committee will send the report to prime minister Shehbaz.

The recommendations on the austerity come in the wake of IMF tranche which Pakistan is likely to seek however reluctant to implement the conditionalities. This hesitation created a deadlock for the last two and a half months with the IMF.

Pakistan revived a stalled USD 6 billion IMF programme last year which was initially agreed upon in 2019 but is finding it hard to meet the tough conditions of the Washington-based global lender.

As per the reports the IMF may not release more funds under the programme until the pledges made by the government are met.

The International Monetary Fund (IMF) also requested additional information regarding the budget from Pakistan, as the country urgently needs to generate USD 10 billion in foreign loans, Geo News reported.