{{Short description|Power Companies Public Debt in Pakistan}} In Pakistan, '''circular debt''' is a public debt that is a cascade of unpaid government subsidies,<ref>{{Cite journal |last=Tauhidi |first=Amna |last2=Chohan |first2=Usman W. |date=2020-01-29 |title=The Conundrum of Circular Debt |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3513225 |journal=CASS Working Papers on Economics & National Affairs |doi=10.2139/ssrn.3513225 |ssrn=3513225}}</ref> which results in the accumulation of debt on distribution companies. When this happens, the distribution companies cannot pay independent power producers, who in turn are unable to pay fuel-providing companies, thus creating the debt effect as seen in the country.<ref>{{Cite web |last=Hashim |first=Asad |title=Lights out: ‘Circular debt’ cripples Pakistan’s power sector |url=https://www.aljazeera.com/economy/2019/5/24/lights-out-circular-debt-cripples-pakistans-power-sector |access-date=2025-09-24 |website=Al Jazeera |language=en}}</ref>
Circular debt started accumulating in Pakistan from 2006. While successive governments have attempted to reduce it burdens via a series of regular payments, they have been unable to control the inflow of new debt.<ref>{{Cite web |last=Kiani |first=Khaleeq |date=2025-09-06 |title=Weak reforms fuel Pakistan’s energy black hole |url=https://www.dawn.com/news/1940070 |access-date=2025-09-24 |website=Dawn |language=en}}</ref>
As of July 2024, the total circular debt of Pakistan was {{PKR|5730 billion}}.<ref>{{Cite web |last=Rana |first=Shahbaz |date=2024-01-16 |title=Circular debt reaches Rs5.73tr |url=https://tribune.com.pk/story/2453386/circular-debt-reaches-rs573tr |access-date=2025-09-24 |website=The Express Tribune |language=en}}</ref> As of 30 June 2025, it stood at Rs. 1.6 trillion.<ref>{{Cite web |last=Ghumman |first=Mushtaq |date=2025-07-31 |title=Power sector’s circular debt hits Rs1.6trn mark: CPPA-G |url=https://www.brecorder.com/news/40375486 |access-date=2025-09-24 |website=Business Recorder |language=en}}</ref>
==References== {{reflist}}
{{Economy of Pakistan}}
Category:Debt Category:National debt of Pakistan Category:Economy of Pakistan Category:Electric power in Pakistan
{{Pakistan-stub}}