In Pakistan, circular debt is a public debt which is a cascade of unpaid government subsidies, ^[1] which results in 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. ^[2]

As of March 2024, the total circular debt of Pakistan was Rs. 3,000 billion. ^[3]

References

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