The federal government has decided to continue its austerity policy for the 2026-27 fiscal year, introducing a fresh set of measures aimed at controlling public expenditure and improving fiscal discipline.
Read More: Federal government extends austerity measures to curb spending
According to a notification issued by the Ministry of Finance, the cost-cutting policy that has been in place in recent years will remain effective throughout the current financial year. The move is part of the government’s broader strategy to manage expenditures while maintaining economic stability.
Under the revised austerity framework, all government posts that have remained vacant for the past three years will be abolished. The decision is intended to reduce the financial burden on the national exchequer and streamline the size of the federal workforce.
The notification also maintains the ban on the creation of new government positions, except in cases approved under existing rules. Authorities believe the measure will help curb recurring salary and pension liabilities while encouraging ministries and departments to make more efficient use of existing human resources.
In addition, the government has continued restrictions on the purchase of new official vehicles, a policy introduced as part of earlier expenditure-control initiatives. Ministries and attached departments have been instructed to adhere strictly to the financial guidelines and avoid unnecessary spending.
Officials say the austerity measures are designed to promote prudent financial management at a time when the government is focused on reducing the fiscal deficit and ensuring efficient utilisation of public funds. The policy is expected to complement broader economic reforms aimed at strengthening the country’s financial position.
The Finance Ministry has directed all federal ministries, divisions and government organisations to fully implement the notified measures during the fiscal year. Any exceptions will require approval from the relevant competent authority in accordance with government procedures.
Read More: Pakistan extends austerity measures for another year
Pakistan has adopted similar austerity initiatives in recent years as part of efforts to improve budget management, rationalise government spending and support long-term economic sustainability. The continuation of these measures reflects the government’s commitment to maintaining fiscal discipline while balancing development priorities and essential public services.