ABAD Chairman Warns Higher Interest Rates Will Deepen Construction Industry Challenges
Construction Industry concerns raised by ABAD Chairman Muhammad Hanif Gohar over Pakistan’s 12% policy rate.
Association of Builders and Developers of Pakistan (ABAD) Chairman Muhammad Hanif Gohar has expressed concern over the State Bank of Pakistan’s latest 0.5 percentage-point increase in the policy rate.
He warned that the rise to 12% would create further difficulties for the construction industry. He urged the central bank to reverse the increase and significantly reduce interest rates to support economic recovery.
Gohar said higher borrowing costs could affect construction projects, investment and employment. He also warned that the impact could extend to the wider national economy.
Higher Interest Rates May Delay Construction Projects
Gohar said the policy rate increase could raise the cost of construction projects. Higher interest rates make financing more expensive for developers and investors.
As a result, investors may reconsider planned projects. Developers could also face greater difficulties launching new construction schemes.
Falcon Sports Wins Shaheed-e-Millat Trophy Basketball Festival
He noted that steel bar prices had already increased. The latest interest rate hike could put further pressure on the prices of cement, steel and other construction materials.
These rising costs could add to the challenges facing the industry. They could also make homes and other buildings more expensive for ordinary citizens.
Housing Shortage Could Worsen
Gohar highlighted Pakistan’s estimated shortage of 10 million housing units. He warned that rising construction costs could make homeownership even less affordable for many families.
Higher prices could push homeownership further out of reach for ordinary citizens. The situation could also slow efforts to address the country’s housing needs.
Employment Risks Across More Than 100 Industries
The ABAD chairman said construction supports more than 100 related industries. These include businesses that supply building materials and provide services to construction projects.
He warned that a slowdown in construction activity could affect workers, skilled labourers, contractors and suppliers. Businesses linked to construction could also face lower demand.
Gohar expressed concern that further pressure on the sector could increase unemployment. This could worsen the financial difficulties already facing many households.
He stressed that a strong construction industry plays an important role in economic stability and job creation.
ABAD Calls for a Policy Review
Gohar urged policymakers to recognise the construction industry’s contribution to economic growth. He said interest rate decisions should account for their potential impact on investment, housing affordability and employment.
He called for a significant reduction in borrowing costs to help revive construction activity. He also urged the authorities to address the challenges facing developers before they cause further damage to investment and job opportunities.
