The International Monetary Fund (IMF) is discussing proposed electricity tariff changes with Pakistan's government. The IMF said on Saturday that the tariff increase should not burden middle- or lower-income households. "The ongoing discussions with the authorities will assess whether the proposed tariff revisions are consistent with these commitments and evaluate their potential impact on macroeconomic stability, including inflation," said the IMF in a statement to Reuters. Pakistan has announced plans to overhaul electricity tariffs. Experts warned this could push inflation higher but could help industry by reducing financial pressure. This move comes ahead of a review of Pakistan's $7 billion Extended Fund Facility (EFF) deal with the IMF. The EFF is a long-term loan program to fix deep economic issues and balance payments. Electricity prices strongly affect Pakistan’s consumer price index. Adjusting tariffs is very sensitive since inflation is still an important political and economic worry, even though it has dropped from its near 40% peak last year. Pakistan’s power sector struggles with circular debt—a chain of unpaid bills and subsidies across power companies and the government. This problem has caused repeated tariff hikes since 2023 under IMF reforms. The IMF added that the circular debt growth has stayed within program targets thanks to better recovery and loss prevention efforts.