The federal government has informed the International Monetary Fund (IMF) that the power sector’s circular debt is projected to increase by Rs. 100 billion in the current fiscal year, sources told Raised By Numbers. By June 2025, the total circular debt is expected to surpass Rs. 2.55 trillion.
Current data reveals that the power sector’s circular debt has already escalated to Rs. 2.4 trillion. The IMF has expressed dissatisfaction with the management of this debt and has urged the government to implement swift measures to control it. A key demand from the IMF is to prevent the circular debt from exceeding Rs. 2.5 trillion.
Despite Pakistan’s assurances to the IMF that timely tariff adjustments would be made to curb the circular debt, the issue remains unresolved. Last year, the government’s failure to manage the debt according to the agreed share plan further complicated the situation.
Sources added that the IMF has stressed the importance of keeping the circular debt within the agreed limit of Rs. 2.31 trillion for the current financial year. Failure to adhere to this limit would constitute a breach of the loan agreement and could negatively impact future discussions on financial commitments.
