What is the primary adverse macroeconomic impact of Pakistan’s power sector circular debt?

💡 Explanation:

The circular debt is a financial shortfall that arises from non-payment along the energy supply chain (consumers to distribution companies to power producers to fuel suppliers). The government is ultimately forced to cover the gap through subsidies, capacity payments, or debt servicing (e.g., through PHPL loans and bonds). This unbudgeted public spending and financial commitment directly adds to the government's expenditure, significantly increasing the national fiscal deficit.