IMF asks Pakistan to reduce circular debt to zero in current fiscal year

The International Monetary Fund (IMF) has asked Pakistan to reduce inflows into the considerable circular debt to zero from the current fiscal year. The inefficiencies of the Power Distribution Companies (Discos) have continued to be a significant factor, resulting in losses of Rs265 billion in FY25 compared to Rs276 billion in FY24. Additionally, under recoveries were recorded at Rs132 billion in FY25, down from Rs315 billion in FY24. The IMF has been briefed about the baseline tariff, which will be implemented from January 1, 2026.