PM Shehbaz reviews austerity proposals ahead of action plan amid Middle East crisis

Prime Minister Shehbaz Sharif on Sunday reviewed multiple proposals and recommendations for implementing austerity and prudent spending, with a final action plan scheduled for formal announcement on Monday (tomorrow) as the Middle East crisis widens.

PM Shehbaz, a day earlier, conducted the meeting directing the relevant ministries to prepare a comprehensive plan based on austerity and savings in light of global economic pressures caused by regional tensions.

He instructed authorities to formulate a strategy focused on economic growth, simplicity, and savings, and directed the concerned committee to present practical and workable recommendations within 48 hours.

According to the Prime Minister’s Office (PMO), today’s high-level meeting aimed to review measures to maintain economic stability amid recent international tensions.

“The prime minister received a detailed briefing on the potential economic impact of the evolving global situation, particularly on Pakistan’s energy supplies and fluctuations in international markets,” the statement said.

“In view of the recent international developments, timely implementation of measures to safeguard the national economy is essential,” PM Shehbaz said. “The government is closely monitoring the situation and will take all necessary decisions to ensure the stability of the economy.”

He pledged that all possible steps would be taken to protect public interests and maintain economic stability during this challenging period. He directed the federal cabinet, provincial representatives, and senior officials to ensure efficient use of resources and provide relief to the public.

The PM emphasised the need for wise management of national resources during this difficult period and assured that once the situation improves, the government would provide greater relief to the public.

The statement added that austerity measures would not affect the industrial and agricultural sectors, ensuring production, exports, and food security remain intact.

Read More: PM Shehbaz orders austerity measures

“Everyone should bear the burden of savings and austerity fairly. The privileged segments of society and elite classes should set an example in making the necessary adjustments,” the PM said.

Officials also confirmed that Pakistan currently has adequate stocks of diesel, petrol, and other petroleum products, and the government has taken precautionary measures to manage any emergency situation. The meeting stressed careful and efficient use of energy.

The IT ministry was also instructed to provide a system for continuous monitoring of supply and demand to enable timely decision-making, and provincial chief secretaries briefed the Prime Minister on economic activities, energy use, and administrative preparedness in their regions.

Regional tensions escalated sharply after air strikes by the United States and Israel last week killed Ayatollah Ali Khamenei, Iran’s Supreme Leader, along with several senior officials. The strikes triggered retaliatory actions by Iran, widening the conflict across the region.

In response, Iran launched attacks on US military bases in several Gulf countries, significantly expanding the confrontation.

Also Read: Iran says it could fight US and Israel for six months as regional conflict widens

Iran has also closed the Strait of Hormuz following airstrikes by the United States and Israel last week, halting the movement of oil supplies to many countries.

As a result, crude oil prices on Friday recorded their strongest weekly gain since the extreme volatility during the COVID-19 pandemic in spring 2020, as shipping and energy exports through the key waterway were disrupted.

Following this, the government sharply increased diesel and petrol prices by Rs55 per litre, or 20% — marking the first in a series of similar surges expected in the coming days due to the ongoing US-Israel and Iran conflict, which has disrupted supply chains and pushed crude oil prices to a two-year high.

The increase in petrol prices was more than the surge in international markets, as the government chose to collect more money than required from motorcyclists and car owners to subsidise the use of diesel, mostly by the public transport and agriculture sectors.