Pakistan Enforces Strict Austerity Measures to Alleviate Economic Woes

Pakistan's government has announced a comprehensive ban on various expenditures such as buying new vehicles, machinery, and state-funded medical treatments abroad. The move aims to reduce the burden on the country’s overstrained national treasury amidst rising taxes and energy costs.

Pakistan's government has implemented a sweeping ban on certain expenditures, including the purchase of new vehicles and machinery and state-funded medical treatments abroad, according to a statement from the Finance Division, as reported by Dawn. The announcement, dated September 4, aims to mitigate the strain on the national treasury.

The restrictions specifically target the acquisition of all vehicles except operational ones such as ambulances, fire fighting vehicles, and buses for educational institutions. Machinery procurement, except for hospitals, laboratories, schools, agriculture, and mining sectors, is also prohibited. Additionally, the formation of new government posts and non-essential foreign visits funded by the government are now banned.

The statement emphasized that all ministries and divisions must ensure compliance across all departments. There is also a restriction on staffing federal universities and hospitals, with exceptions made only for academic staff hired on lump-sum packages. This follows a precedent set by Khyber Pakhtunkhwa's finance department, which earlier banned similar expenditures.

The stringent measures come in the wake of heavy criticism of the new budget for imposing high taxes and raising energy costs while seeking a USD 7 billion economic bailout from the International Monetary Fund (IMF).