ISLAMABAD: Members of Pakistan's federal cabinet have decided to forego their salaries, perks, and other privileges, Prime Minister Shehbaz Sharif announced on Wednesday, as Islamabad continues to grapple with serious economic crises with prospects of default looming large. 

On January 13, the finance ministry announced that Sharif had set up a National Austerity Committee to recommend how public expenditure can be reduced and ensure "fiscal discipline" to reduce unnecessary expenditures. 

The move comes at a time as Islamabad eyes a staff-level agreement with the International Monetary Fund (IMF) to shore up its foreign exchange reserves, which have fallen to alarmingly low levels. As Pakistan's foreign reserves dipped over the past year, its currency has also depreciated to historic lows against the U.S. dollar, aggravating the country's economic crisis. 

Flanked by Finance Minister Ishaq Dar and other members of the cabinet, Sharif said the cabinet had decided in its meeting on Wednesday to introduce new austerity measures given Pakistan's current economic situation. 

"All ministers, advisers, ministers of state, and special assistants have decided voluntarily to forego salaries and perks," Sharif told reporters. "All ministers will also pay for water, gas, and electricity bills from their own pockets," he added. 

Sharif said the government is taking back all luxury cars that have been provided to cabinet members, adding that these will be auctioned off. He said if required, each minister would be provided only one car for his/her use. 

“Until June 2024, which means till next year, there will be a complete ban on buying luxury items," the prime minister said. "Until June 2024, there will be a complete ban on buying all types of new cars as well.”

"Federal ministers will travel in and out of the country in the economy class," Sharif announced. "Their support staff will not be allowed to travel with them on foreign trips."

He said cabinet members would also not be allowed to stay at five-star hotels whenever they embark on foreign tours, adding that the current expenditures of all government ministries and divisions would be reduced by 15%. 

He said government officers would only be allowed to travel on government expenditure on "obligatory visits."

In response to a question, the prime minister said the cabinet had discussed reducing the size of its 83-member cabinet to send a positive message to the public. 

"We have decided to postpone this [decision] for a few days. But since you have asked me about it—and I could have ignored the question—but you will hear good news about it soon," he added. 

Sharif spoke about Pakistan's negotiations with the IMF, saying that his government would steer Pakistan out of its current economic crisis. 

"Without going into details, I'll say that as far as the staff-level agreement is concerned and their [IMF] board meeting, we have fulfilled almost all of their conditions," the prime minister said.