Pakistan energy crisis: Markets and restaurants shut early as economy remains vulnerable amid IMF bailout impasse

Islamabad/New Delhi
CNN
—

Pakistan’s economic woes show no sign of abating in 2023.

The South Asian nation announced a new energy saving plan on Tuesday as its fragile economy continues to grapple with numerous challenges. The government has ordered all markets to close by 8:30 p.m. and restaurants by 10 p.m., according to a tweet from their ruling party. These measures will help the country save 62 billion Pakistani rupees ($274 million), the Post added.

Prime Minister Shehbaz Sharif has also instructed all federal ministries to reduce their energy consumption by 30%. The country is in the midst of a severe energy crisis and is heavily dependent on imported fuel.

The announcement comes at a time when Pakistan’s foreign exchange reserves have dwindled to alarmingly low levels. As of December, Pakistan’s total liquid foreign exchange reserves were US$11.7 billion, which is half the amount it held at the beginning of last year, according to the central bank.

The country’s finances are also suffering from disagreements with the International Monetary Fund (IMF) over a review process that has delayed the release of a $1.1 billion bailout tranche.

“Survival without the IMF is not an option given the magnitude of external financing needs,” analysts at Arif Habib, a Karachi-based research firm, wrote in a recent report.

Pakistan, too, had tried several energy-saving measures in the past year, including shortening the working week.