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Fiscal Fortress: PM Sharif Extends Austerity Drive to Shield Economy from Middle East War Spillovers
Prime Minister Shehbaz Sharif has officially extended the federal government's strict austerity measures until June 13, 2026, as Pakistan moves to insulate its fragile economy from the deepening volatility caused by the ongoing Middle East conflict.
ND
by News Desk
2026-05-11
Fiscal Fortress: PM Sharif Extends Austerity Drive to Shield Economy from Middle East War Spillovers

In response to the global energy crisis triggered by the ongoing Middle East conflict, Prime Minister Shehbaz Sharif has officially extended the federal government's comprehensive austerity measures through June 13, 2026.

The initiative, originally launched in March following the economic shocks of the US-Israel-Iran war, aims to drastically reduce government spending and conserve fuel reserves as international oil prices remain volatile.

Key Austerity Measures Extended

The Cabinet Division’s latest notification outlines strict protocols to curb public expenditure:

  • Fuel & Vehicle Restrictions: Fuel allowances for official government vehicles have been slashed by 50%. Additionally, 60% of the government's vehicle fleet remains grounded. Emergency and operational services, such as ambulances and public transport, are exempt from these cuts.

  • Travel Bans: A total ban on foreign visits for ministers and government officials continues, with exceptions only for high-priority missions deemed vital to national interests.

  • Reduced Work Week: Government offices will continue to operate on a four-day work week (Monday to Thursday) to lower utility and fuel consumption. Banks, hospitals, and the industrial sector remain on standard schedules.

  • Salary Reductions: Parliamentarians are facing a 25% pay cut, while employees of state-owned enterprises (SOEs) and other government institutions are seeing tiered salary reductions ranging from 5% to 30%.

  • Operational Cuts: A 20% budget reduction has been applied across all government departments, accompanied by a continued freeze on purchasing furniture, air conditioners, and new vehicles.

Targeted Relief and Monitoring

While the government is tightening its own belt, the Prime Minister has maintained specific subsidies to protect the most vulnerable citizens:

  • Transport Subsidies: Fuel relief for motorcyclists, farmers, and public transport operators has been extended by an additional month to buffer the impact of global price shocks.

  • Third-Party Oversight: To ensure transparency, the Intelligence Bureau (IB) has been tasked with conducting an independent audit to verify that these austerity measures are being strictly implemented across all departments.
Tagged:

#PakistanEconomy #AusterityDrive #ShehbazSharif #MiddleEastWar #EconomicCrisis #FiscalPolicy #EnergyCrisis #PakistanNews #ForexReserves #Budget2026 #BreakingNewsPakistan #PMO
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