Karachi, July 28, 2025 : The Chairman of the Association of Builders and Developers of Pakistan ABAD Mohammad Hassan Bakhsh, has urged the federal government and the State Bank of Pakistan to bring the interest rate down to 9 percent in order to stimulate the economy, increase investment and revive the crisis-hit construction and housing sectors.
Chairman Bakhshi said that the current 11 percent interest rate is strangling business activity nationwide blocking private investment and causing economic stagnation. He warned that if reforms are not made in monetary policy, Pakistan could face serious issues like prolonged recession, rising unemployment, and a decline in industrial production.
He emphasized that the government should reduce the interest rate to single digits in the upcoming monetary policy announcement on July 30. He stated that while economies around the world are lowering interest rates to boost growth, Pakistan’s economy is being crippled by an unrealistic monetary policy, which is destroying local industry.
He further said that the construction industry, which provides direct and indirect employment to millions and energizes more than 100 allied industries, cannot survive under the current interest rate regime.
According to ABAD, reducing the interest rate will unlock private investment, make housing finance more affordable, and create economic activity across various sectors.
ABAD urged the government to take immediate action to restore investor confidence, stabilize economic policy, facilitate real estate development, and introduce builder-friendly regulations.
Hassan Bakhshi warned that local and foreign investors are already shifting their capital to Dubai and other regional countries where better returns and safer investment environments are available.
“If Pakistan wants to compete regionally and attract investment, it must align its financial and economic policies with ground realities,” he stressed.
He concluded that low-interest housing loans would not only allow low-income groups to own homes, but also boost industries like cement, steel, electrical, and others, ultimately increasing GDP and government revenue.
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