Amid the growing economic turmoil in the country, the Pakistan government said on Tuesday that it had approved the energy conservation plan that will enforce the closure of markets at 8:30 pm and wedding halls at 10 pm. Pakistan Defence Minister Khawaja Asif made the announcement during a press conference flanked by other cabinet ministers. “The cabinet, on the recommendation of the power division, has allowed enforcing the energy-saving plan which will be applied to the entire country,” Asif was quoted as saying by Geo News.
Asif said that Prime Minister Shehbaz Sharif has directed to decrease the usage of electricity used by all federal government departments by 30 per cent. PM Sharif also directed against unimportant usage of electricity in offices.
This development comes as many observers and experts have been ringing alarm bells that Pakistan is dangerously close to default. On Sunday, former finance minister Miftah Ismail said “if Pakistan does default, God forbid – which, I believe can be avoided – it would take six months at the minimum to recover.”
“What would happen if such a thing happens to pass is that we will have to go back to the International Monetary Fund and other lenders, and will have to request them that we will pay any amount due to them this year in the year that follows,” he said in an interview with The Express Tribune newspaper. The Pakistan Finance Ministry last week forecasted that inflation will stay high as it warned that the cash-strapped nation is staring at ‘severe headwinds’ in the current fiscal year, the Dawn newspaper reported. “For FY23, economic growth is likely to remain below the budgeted target due to devastation caused by floods. This combination of low growth, high inflation, and low levels of official foreign exchange reserves are the key challenges for policymakers,” said the alert issued by Pakistan Finance Ministry in its Monthly Economic Update and Outlook.
According to the economic outlook, Pakistan’s overall fiscal deficit stood at 1.5 per cent of GDP during July-October 2022-23 as compared to 0.9 per cent of GDP last year. The Dawn report said the fiscal deterioration was because of higher expenditure growth on the back of higher markup payments while the government is facing the challenge of providing relief to people in flood-hit areas.