Pakistan extends austerity measures for FY2026–27 amid high fuel cost

ISLAMABAD: The Pakistan government has decided to continue its austerity drive for the 2026–27 fiscal year, with the Ministry of Finance issuing a formal notification outlining the latest cost-saving measures.

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.

Read more: PM Office seeks report on compliance of austerity measures

CJP orders withdrawal of Supreme Court austerity measures

In June, the Chief Justice of Pakistan (CJP) Justice Yahya Afridi ordered the discontinuation of austerity measures previously implemented in the Supreme Court, with the policy set to formally end from 15 June 2026.

Supreme Court of Pakistan austerity measures included a four-day workweek (Monday to Thursday), a 50% reduction in petroleum fuel allocations for official vehicles, and restricted protocols for judges. To sustain access to justice, courts prioritize video-link hearings, though Friday dockets are strictly limited to urgent matters.

According to an official notification, the austerity-related directive issued on 10 March 2026 had been withdrawn.

The notification states that the Supreme Court’s austerity policy would cease to be effective from 15 June 2026, following the Chief Justice’s approval.

As a result, all administrative and operational affairs of the Supreme Court will resume under normal procedures from 15 June, with court functions returning to routine operations.