To combat country’s economic crisis, a 10% salary cut is being considered

Due to dwindling foreign exchange reserves, Pakistan is facing one of its worst economic crises in recent memory.

In light of the impending economic crisis in the cash-strapped nation, a report in the media on Wednesday stated that Pakistan is considering a variety of proposals, one of which calls for slashing the salaries of government employees across the board by ten percent.

Due to dwindling foreign exchange reserves, Pakistan is facing one of its worst economic crises in recent memory.

According to reports, the National Austerity Committee (NAC), which was established by Prime Minister Shehbaz Sharif, is looking into a variety of options, one of which is reducing the salaries of government employees by 10% across the board.

The report said the NAC is also considering reducing ministry and division expenditures by 15%, slashing the number of federal ministers, ministers of state, and advisers from 78 to 30, with the remaining ones being required to work on a pro bono basis.

The committee will deliver the report to Prime Minister Shehbaz after finalizing the recommendations on Wednesday.

As it seeks a second tranche from the International Monetary Fund (IMF), the government is finalizing its austerity recommendations, but it is reluctant to implement the conditions.

With the IMF, this trepidation resulted in a deadlock for the past two and a half months.

Pakistan, which is short on cash, revived a stalled USD 6 billion IMF program that was originally agreed upon for 2019 but is having trouble meeting the strict requirements of the global lender based in Washington.

There are rumors that the IMF may withhold additional funds from the program until the government fulfills its promises.

The seventh and eighth reviews of Pakistan’s bailout program were approved by the IMF board in August, allowing for a release of more than USD 1.1 billion.

The ninth review of a loan arrangement that the previous government signed with the IMF is currently pending in Islamabad. The review would result in Pakistan receiving the next installment of funds, which has been delayed since September.

Officials from the IMF have stated that they are willing to continue working with Pakistan, but the nation needs to fulfill some fundamental requirements first.

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