SBP upsets businesses by keeping interest rates unchanged.
We have set fire to economy; we will have to put it out. Mian Zahid Hussain.
Karachi, May-01-2024: Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Wednesday that the International Monetary Fund’s (IMF) disbursement of the $1.1 billion tranche deserves praise.
SBP’s decision to keep interest rates unchanged has disappointed the business community, he said.
Mian Zahid Hussain said that we are responsible for the devastation of the country’s economy and will have to fix it as no one else is going to do it for us.
Talking to the business community, the veteran business leader said that the IMF decision is a reason for satisfaction. This shows that the confidence of lender is increasing in Pakistan, which will also increase the confidence of friendly countries and other creditors.
The business leader said that the IMF’s move would also pave the way for a new three-year loan from the IMF as the lender is satisfied with the government’s policy and financial measures.
Mian Zahid Hussain said that the economic condition of Pakistan is improving, inflation is also decreasing, and in these circumstances, it would have been better if the interest rate had been reduced.
However, the Central Bank was afraid that inflation could bounce back therefore the interest rate was maintained, which has disappointed the business community.
He demanded that the SBP reduce policy rates in the following review. Mian Zahid Hussain said that we have set fire to the country’s economy, and we have to put it out. International organizations and friendly countries cannot do anything in this regard.
To improve the economy, painful reforms and improvements in the tax system need to be done in order to get out of the chronic payments crisis.
Due to the ignoring merit, the influential are getting richer; the people are getting poorer while the country’s economy is getting weaker, he observed.
He warned that now is the time to rectify the situation; otherwise, it will be impossible to run the country. Mian Zahid Hussain said that right now, our growth rate is less than two per cent, which is impossible to increase under the supervision of the IMF.
Economic prosperity is only possible with debt relief. Next year, we have to pay 24 billion dollars in debt and interest, which is three times more than the current reserves of the central bank, while we have to pay more than 8000 billion rupees in interest on domestic debt, which is 90% of our total revenue.
Mian Zahid Hussain further said that the failed institutions that are facing difficulties in privatization should be closed immediately because trillions of rupees are being wasted year after year running them. Still, it has become difficult to run them now.
