Circular Debt to Spike by Rs. 100 Billion This Fiscal Year

The federal government has informed the International Monetary Fund (IMF) that the power sector’s circular debt is set to rise by Rs. 100 billion in the current fiscal year, high-level sources told ProPakistani. By June 2025, the total circular debt is expected to exceed Rs. 2.55 trillion. Current figures indicate that the power sector’s circular debt has already surged by Rs 2.4 trillion. The IMF has expressed dissatisfaction with the management of circular debt and urged the government to take swift measures to control it. One of the key demands from the IMF is to prevent the circular debt from surpassing Rs 2.5 trillion. Despite assurances from Pakistan to the IMF that timely tariff adjustments would be made to curb circular debt, the issue persists. Last year, the government’s failure to control the debt in accordance with the agreed share plan has further complicated matters. Sources said the IMF has emphasized that Pakistan must keep the circular debt within the agreed limit of Rs 2.31 trillion, as outlined for the current financial year. Failing to do so would constitute a violation of the loan agreement and impact future talks on financial commitments.