ISLAMABAD, Jan 3 – Pakistan’s government has ordered the closure of all shopping malls and markets until 8:30 p.m. among other measures in a new energy-saving plan to curb worsening economic crisis, the Pakistani defense minister said Tuesday, as the country grapples with an economic crisis.
Pakistan’s foreign exchange reserves barely cover monthly imports, most of which are energy purchases from abroad, while funds expected under an International Monetary Fund (IMF) program have been delayed.
Khawaja Asif told reporters that the cabinet-approved measures to close markets, including restaurants, are aimed at saving the cash-strapped country about 62 billion Pakistani rupees ($273 million).
He said other immediate measures include closing wedding halls till 10pm. daily. He added that some market representatives had pushed for longer working hours, but the government decided an earlier closure was necessary.
Asif also said that Prime Minister Shehbaz Sharif has ordered all government departments to reduce electricity consumption by 30%.
The move comes as Pakistan struggles to quell default concerns in both domestic and international markets, with a $1.1 billion IMF bailout stalled over differences in the ninth program review due to be completed in November.
Other important multilateral and bilateral financing avenues are also tied to the IMF program, meaning the South Asian nation of 220 million is hard pressed to meet external financing needs of more than $30 billion by June 2023, including debt repayments and energy imports.
Pakistan’s total liquid foreign exchange reserves stood at $11.7 billion at the end of last month — $5.8 billion with the central bank — and will decline by 50% in 2022.
Asif said the energy-saving plan also included banning the manufacture of energy-inefficient light bulbs and fans from February and July.
He added that Pakistan’s peak summer electricity consumption was 29,000 megawatts (MW) compared to 12,000 MW in winter, mainly due to the use of fans in the warmer months.
Half of the street lights across the country will remain switched off as a “symbolic” gesture, the minister said.
Most of Pakistan’s electricity is generated using imported fossil fuels, including liquefied natural gas, whose prices have skyrocketed in recent months.
The government tried to stabilize the economy by curbing imports and decades of high inflation. A rapidly depreciating currency made imports more expensive, while consumer prices rose 25% year-on-year in the first half of the current fiscal year.