On March 7, 2025, the International Monetary Fund (IMF) turned up the heat on Pakistan, demanding action to shrink its circular debt during a focused session within ongoing negotiations.
Pakistan pitched a Rs1,250 billion bank loan to trim the Pakistan Circular Debt by that amount, with Rs300 billion potentially cleared soon, sources revealed. The plan’s a lifeline but it comes with a catch.
“Borrow Rs1,250 billion and waive up to Rs600 billion in late payment surcharges,” Pakistan told the IMF. A Rs2.8 per unit consumer surcharge is on the table to fund it. Sources say the past six months shaved Rs10 billion off debt stocks, but rising power demand in the next half-year could balloon it again up to Rs350 billion this fiscal year, as forecast. A broader debt strategy is shaping up, set for final talks soon.
Mini-Budget Out, Tax Push In
Thursday, the feds ditched an FY 2024-25 mini-budget, pivoting to plug a Rs605 billion gap in another way, fast-tracking tax cases in court. PM Shehbaz Sharif and Chief Justice Yahya Afridi greenlit the rush, with a key Supreme Court hearing slated for March 10. The IMF is in the loop, watching Pakistan juggling Pakistan Circular Debt cuts with revenue woes.
Read: Pakistan Secures Rs1.25 Trillion Loan to Slash Power Sector Debt
The Pakistan Circular Debt saga, which involves a Rs 1,250 B loan, a surcharge sting, and no mini-budget, keeps IMF talks electric.
