Karachi
\nMian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, today expressed deep concern over the State Bank decision to keep the benchmark policy rate unchanged at 11.00%.
\nHe warned that the persistence of high financing costs, coupled with external pressures, poses a significant threat to industrial growth and the country\u2019s export competitiveness.
\nThe SBP\u2019s Monetary Policy Committee (MPC) opted for an unnecessary \u201chighly cautious approach,\u201d citing significant external uncertainty and the need to mitigate renewed inflationary pressures, particularly those stemming from the severe monsoon floods which constitute a substantial supply shock. While acknowledging the SBP\u2019s goal of market stability, Mr. Hussain, argued that this decision places an undue burden on the business community.
\n\u201cThe decision to hold the policy rate steady means high financing costs for businesses will persist into the subsequent quarter. This action, despite signs of moderation in core inflation, postpones the benefits of lower borrowing costs critically needed for economic activities,\u201d stated Mr. Hussain.
\nMr. Hussain emphasized that the central bank\u2019s prioritization of averting second-order inflationary effects\u2014namely, a spike in food prices and increased import demand due to crop damage from floods\u2014will have severe consequences for Pakistan\u2019s external and industrial sectors. \u201cThe continued high interest rate is an immediate roadblock to economic recovery.
\nHigh borrowing costs make local products non-competitive, a factor that will inevitably lead to a contraction of exports and a decline in the industrial climate in the country,\u201d he asserted.
\nAs the country faces the challenge of an inflating trade deficit, Mr. Hussain, a former Provincial Minister Sindh for Information Technology, called for a decisive shift in economic policy to support the private sector\u2014the engine of employment and growth. \u201cFor Pakistan to effectively counter an inflating trade deficit, the government must take immediate steps to reduce the cost of doing business. The primary levers are clear: we must aggressively reduce interest costs and energy tariffs.\u201d For earning dollars through Exports and reducing trade deficit.
\nHe concluded by urging the government and SBP to revisit their calibration, prioritizing the need to stimulate investment and production through monetary easing to ensure medium-term growth is not sacrificed for short-term price stability.<\/p>\n","protected":false},"excerpt":{"rendered":"
Karachi Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, today expressed deep concern over the State Bank decision to keep the benchmark policy rate unchanged at 11.00%. He warned that the persistence of […]<\/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":{"0":"post-507962","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n