Inflows.

It seems as though the firm stance taken by the International Monetary Fund (IMF) and World Bank (WB) is not likely to soften as the latter delayed the disbursement of two policy loans worth $1.1 billion each, citing the uncontrolled increase in circular debt as the reason for the delay. In the meantime, Pakistan is no loser to fulfilling the terms set forth by the IMF for the ninth review of its programme either. As a result, our government has found itself in a situation where the economy is cash-strapped, on the verge of default, supporting a negative balance of payments and experiencing an all-time low when it comes to foreign direct investment (FDI) which has plunged by 59%.

A prominent cause for concern is the mounting circular debt-which had reached Rs.4177 billion in December 2022-generated by the power sector. Both financial organisations have been pushing for policy changes that not only eliminate unbudgeted subsidies but counteract losses incurred through transmission, distribution, untimely tariff adjustments, theft, a lack of investment in the sector and the corrupt and lazy work ethic of relevant bodies. Considering that we are edging towards these default, and debt accumulation keeps increasing, these demands are logically justified and have enabled such financial bodies to reach the conclusion that no further loans should be given without new and sustainable policies if...

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