Interest rates should drop by 10% as inflation declines
\n Islamabad
\nChairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that inflation in the country is decreasing after two long years.
\nHe praised the government for reducing the inflation rate from 38 percent to 12 percent, stating that the State Bank must now lower interest rates by at least 10%.
\nMian Zahid Hussain said that cutting interest rates is also important to provide some relief to the public and the business community, reduce unemployment, and increase exports.
\nTalking to the business community, the veteran business leader said that people have been suffering from a 22% interest rate since last year, which is seriously affecting businesses and promoting unemployment, while causing a lot of damage to the government.
\nThis year\u2019s interest payment will cost nine thousand billion rupees. A 10% reduction in interest rates will also halve the government\u2019s interest payment burden.
\nAccording to the Bureau of Statistics, the consumer price index was 11.8 percent in May, which was 17.3 percent in April. Inflation has decreased by 8.62% compared to last month.
\nLast year, the inflation rate reached a record high of 38 percent. Keeping these figures in mind, the central bank should cut interest rates by 10 percent in its June 10 meeting so that economic conditions can improve, as unnecessary caution has hurt the economy.
\nMian Zahid Hussain said that economic activity in the country has been sluggish for the past two years as the government has implemented some tough reforms under the bailout package of the International Monetary Fund to stabilize the declining economy, but many of the reforms have been politically motivated.
\nThe ongoing neglect of important reforms and the slow progress on some are not producing the desired results.
\nHe said that experts expect the GDP growth rate to be 2 percent in the fiscal year ending in June, which was negative last year, while the government may keep the growth rate target for the new fiscal year at 3.5 percent. This is because it expects an increase in economic activity, but if tax increases and energy prices continue to rise, the expected increase in economic activity will be difficult.
\nMian Zahid Hussain said that the government has formally approached the IMF for a new long-term bailout package after completing the short-term program to fully address the risk of bankruptcy.
\nStaff-level meetings have also been held and are masses are awaiting for positive results. The IMF, which previously insisted on a strict monetary policy to control inflation, has now relaxed its stance following the reduction in inflation. The government ought to capitalize on this opportunity.<\/p>\n","protected":false},"excerpt":{"rendered":"
Interest rates should drop by 10% as inflation declines Islamabad Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that inflation in the country is decreasing after two long years. He praised the government for reducing the inflation […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-411599","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n