Higher Interest Rates to Hinder Job Creation and Export Growth Efforts
Islamabad : Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has termed the State Bank’s decision to maintain the interest rate as an anti-business move. He stated that the State Bank’s decision to keep the policy rate unchanged is incorrect, arguing that if the inflation rate is 7.2 percent, the interest rate should be at six percent. He highlighted that Pakistan’s interest rate is higher than that of other countries in the region, and a reduction in the interest rate could have potentially lowered government debt.
President Atif Ikram mentioned that the interest rate in India is six percent and in Vietnam is three percent, asserting that keeping the interest rate high negatively impacts currency circulation. He demanded that for the betterment of businesses, the interest rate should be in single digits. He emphasized that if the interest rate were in single digits, production costs would decrease, and a reduction in production costs would lead to a decline in inflation.
President FPCCI Atif Ikram further added that higher interest rates would increase the cost of borrowing, making it difficult for businesses to expand and invest in new projects. He stressed that until interest rates are reduced, businesses will face severe difficulties, especially in the current challenging economic conditions. This, he concluded, would hinder efforts to create employment opportunities and boost exports.
Sohail Majeed is a Special Correspondent at The Diplomatic Insight. He has twelve plus years of experience in journalism & reporting. He covers International Affairs, Diplomacy, UN, Sports, Climate Change, Economy, Technology, and Health.
