President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Wednesday lauded the Prime Minister’s relief package for economic revival.
However, he said that reduction in interest rates by the central bank is insufficient as double-digit policy rates amount to economic suicide.
Talking to the business community, the veteran business leader said that existing interest rates, increasing debt, circular debt, energy prices, mounting taxes, falling exports and highhandedness of energy companies is more damaging than the coronavirus.
The former minister noted that a weak economy cannot withstand shocks, therefore, policymakers should take concrete steps to strengthen it. He said that on one hand country is losing export orders while on the other exporters are being harassed. The K-Electric is trying to extract Rs5 billion from the industrial sector which is condemnable, he added.
He said that economic experts had warned against attracting hot money through high interest rates which has not backfired as foreign investors have pulled over 1.3 billion dollars in a short span.
He said that high interest rates attracted hot money but it weakened all the important sectors of the economy including the industrial sector. Other countries that attracted hot money are also suffering as foreigners have pulled out 30 billion dollars from there, he informed.
He said that high interest rates crowded out productive sector damaging production and leaving many unemployed.
He said that state bank has reduced interest rates but it is still enough to damage the struggling economy. He said that petroleum prices have reduced by 70 percent in the international market, therefore, the power and gas tariff should be reduced by fifty percent.