Pakistan govt has stopped salary, bill payments amid economic crisis, says report

Pakistan's economic crisis hit a new low on 25 February 2023 with the government ordering the halting of payment of bills and salaries, according to a news report.

Pakistan's Ministry of Finance and Revenue ordered the Accountant General of Pakistan Revenues (AGPR) to stop clearing bills of federal ministries and departments, according to sources quoted by The News International.

However, salaries and pensions of defence-related institutions were already cleared for March 2023, as per the report.

The Shehbaz Sharif government is currently battling with low foreign exchange reserves, a plummeting currency, electricity outages, and consequent political instability.

Finance Minister Dar while meeting on February 22 with a delegation of Rothschild and Co had said "the government was steering the economy towards stability and growth". He added that "the government is committed to completing the IMF programme and fulfilling all international obligations".

Dar's commitment to unlocking the IMF tranche was visible on February 20 when the national assembly had unanimously approved the Finance (Supplementary) Bill 2023 or "mini-budget" - a move mandatory for seeking funding. The bill increases sales tax from 17 to 25 per cent on imports ranging from cars and household appliances to chocolates and cosmetics. A general sales tax was raised from 17 to 18 per cent.

"The prime minister will also unveil austerity measures in the next few days," the minister told the lower house of parliament as the bill was passed, adding "we will have to take difficult decisions".

(With PTI inputs)