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Saturday, February 4, 2023

Pakistan mulls 10% cut in govt employees’ salaries to battle economic crisis

World NewsPakistan mulls 10% cut in govt employees' salaries to battle economic crisis

Pakistan is mulling various proposals, including a 10 percent across-the-board pay cut for civil servants, according to a media report on Wednesday, amid a deepening economic crisis in the cash-strapped country.

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

Geo News reported that the National Austerity Committee (NAC) set up by Prime Minister Shehbaz Sharif is considering various measures, including a 10 percent cut in the salaries of government employees across the board.

The report said that the NAC is also considering a 15 per cent reduction in the expenditure of ministries/divisions, reducing the number of federal ministers, ministers of state and advisers from 78 to 30, while the rest will be employed on merit basis. should do.

The recommendations will be finalized on Wednesday and the committee will send the report to Prime Minister Shahbaz Sharif.

The government is finalizing the austerity recommendations as it seeks another tranche from the International Monetary Fund (IMF), but the government is reluctant to implement the conditions.

This reluctance led to an impasse with the IMF for the past two and a half months.

Cash-strapped Pakistan last year revived a stalled $6 billion IMF program that was initially agreed in 2019 but has found it difficult to meet the Washington-based world lender’s tough conditions. Is.

There are reports that the IMF may not release more funds under the program until the commitments made by the government are fulfilled.

The IMF board approved the seventh and eighth reviews of Pakistan’s bailout program in August, allowing the release of more than US$1.1 billion.

Islamabad is awaiting the 9th review of the loan arrangement signed with the IMF by the previous government. This review will lead to the release of the next installment of funds to Pakistan, which has been pending since September.

IMF officials have indicated that they are ready to continue working with Pakistan, but the country must first meet some basic requirements.

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