Pakistan is set to revive its International Monetary Fund (IMF) loan program and raise power tariff in order to address its rising circular debt.
As per details, government plans to increase power tariff by Rs 3.30 and revive IMF loan program titled ‘Extended Fund Facility (EFF)’ to address country’s circular debt woes.
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The power tariff hike will be implemented in phases. The first increase is expected to of around Rs 1.90 per unit and will soon be announced by the government.
The power tariff hike is a result of pre-conditions and recommendations adopted by international creditors such as IMF, World Bank, Asian Development Bank (ADB) etc.
Pakistan’s circular debt is expected to rise up to Rs 2,805 billion till June 2021 this year – a figure reported to be around Rs 2,150 billion during 2019-2020.
Country’s circular debt has risen up to Rs 44.8 billion per month during the previous year.
Circular debt has continuously increased in the first five months of current fiscal year (July-November) by Rs 156 billion taking country’s circular debt figures to Rs 2,306 billion from the previous Rs 2,150 billion.
Country’s circular debt went up by Rs 31 billion per month in the first five months of this fiscal year.
