Pakistan sold its embassies and is now shutting malls and markets to save its economy

Pakistan's economic woes continue to impact business operations in the country. In another major decision taken by the Shehbaz Sharif-led government, Pakistan will close its malls and markets by 8.30 pm in order to save energy, Al Jazeera reported. Not only this, government offices have also been asked to reduce electricity consumption by 30%. Plus, wedding halls and restaurants have been ordered shut by 10 pm.

The measures which have been approved by the Cabinet are also expected to save the country about 62 billion Pakistani rupees ($273 million), Defence Minister Khwaja Asif told journalists on Tuesday (January 3).

Curbing electricity usage: The Defence Minister in his address to the media said that the energy conservation plan included the banning of production of energy bulbs and fans which are inefficient from February and July respectively.

He said that Pakistan's summer electricity usage was 29,000 megawatts (MW) compared with 12,000 MW in the winter, mainly due to the usage of fans in hotter months.

In a bid to save energy, half of the country's streetlights will also remain switched off.

What is the economic status of Pakistan: Pakistan has been badly hit by a crippling economy as a monetary funding of $1.1 billion from the International Monetary Fund (IMF) is delayed. Islamabad has differences with the IMF over a review the agency conducted on policy and reforms it needs in Pakistan. This review should have been completed in November.

• Pakistan's liquid foreign exchange reserves stood at $11.7 billion, out of which, $5.8 billion are with the Central Bank. This is half the value of foreign exchange reserves it held at the start of 2022.
• The financial condition spiralled down further, as heavy floods hit the country last year in June, which submerged one-third of the country causing huge devastation and major financial losses.
• The country's inflation is set to remain high between 21-23% and the country's fiscal deficit is widening by more than 115% in the first four months (July-October) of the current fiscal year.
• The country's finance ministry said in its monthly update that the economic growth is more likely to remain below the budgeted target in FY23 due to the devastation caused by the floods.
• The country's foreign exchange reserves barely cover a month's worth of imports, most of which are accounted by the energy purchases from abroad.
• The debt-ridden country needs at least $30 billion up until June 2023, including the debt repayments and energy imports.

Government clueless: The change of government in April 2022 which removed former PM Imran Khan and brought in Shehbaz Sharif, seems clueless on how to tackle this mess. 

• The country was already suffering from financial instability under the tenure of Imran Khan, and Shehbaz Sharif is doing no good to contain the situation. His visit to Saudi Arabia in May 2022 had given Pakistan a financial support package of around USD 8 billion, but that doesn't seem to be helping the country.
• Pakistan also had to sell of its old embassy buildings in US last month as they were lying vacant for past 15 years.

The government has, however, tried to stabilise the economy by containing imports and high inflation. Further, a fast depreciating currency has made the imports more expensive while the consumer prices saw 25% year-on-year rise in the first half of current fiscal year.

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