KARACHI: Leading economists and industry stakeholders are advocating for a significant reduction in Pakistan’s interest rates to boost economic growth, stimulate investment, and relieve financial pressures on businesses and consumers.
In a statement, Ismail Suttar, President of the Hub Chamber of Commerce & Industry (HCCI), observes that despite ongoing economic challenges and high inflation, there is widespread consensus among stakeholders that lowering interest rates could be a crucial step in facilitating the nation’s economic recovery and achieving sustainable long-term prosperity.
President HCCI said that Pakistan’s current policy rate of 19.5% is significantly higher than its neighbours including China and India, giving these countries, as well as Bangladesh and Vietnam, a competitive edge in the export market – acquiring most of Pakistan’s textile customers.
“Our manufacturers across all sectors are struggling to keep production costs under control amidst rising inflation and interest rates,” said Suttar. “If the current policy rate is maintained, Pakistan risks further losing its export customers, potentially worsening the trade deficit.”
Ismail Suttar was of the view that lower interest rates can reduce borrowing costs for businesses, encouraging investments in expansion, technology adoption, and workforce development. This, in turn, can enhance productivity and competitiveness in both domestic and international markets.
He added that decreased interest rates can provide crucial financial relief to Small & Medium Enterprises (SMEs), empowering them to expand operations, drive innovation, and create employment opportunities.
“Pakistan stands at a critical juncture where proactive and bold economic policies are essential,” Suttar added. “By lowering interest rates aggressively, the nation can foster a conducive environment for growth, innovation, and prosperity.”
