Pakistan extends austerity measures for FY2026–27

Published On 22 Jul, 2026
pakistan-extends-austerity-measures-for-fy202627

Following the US-Israel war against Iran back in February, Prime Minister of Pakistan Shehbaz Sharif, in March, announced a wide-ranging set of austerity measures across federal and provincial governments to address the economic challenges and ensure relief for the public.

The notification states that the federal cabinet has approved a new set of austerity measures aimed at controlling public expenditure.

The directives will apply to all federal ministries and departments, autonomous bodies, regulatory authorities, state-owned enterprises and statutory organisations across Pakistan.

According to the notification, compliance with the austerity measures will be treated as a mandatory constitutional directive for all government institutions.

The Austerity Committee has been authorised to grant exemptions on a case-by-case basis where justified by compelling reasons.

The Ministry of Finance has instructed all ministries and divisions to ensure the effective implementation of the austerity policy throughout the 2026–27 financial year.