Karachi (October 10, 2025) : Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, today expressed deep concern over the State Bank decision to keep the benchmark policy rate unchanged at 11.00%. He warned that the persistence of high financing costs, coupled with external pressures, poses a significant threat to industrial growth and the country’s export competitiveness.
The SBP’s Monetary Policy Committee (MPC) opted for an unnecessary “highly cautious approach,” citing significant external uncertainty and the need to mitigate renewed inflationary pressures, particularly those stemming from the severe monsoon floods which constitute a substantial supply shock. While acknowledging the SBP’s goal of market stability, Mr. Hussain, argued that this decision places an undue burden on the business community.
“The decision to hold the policy rate steady means high financing costs for businesses will persist into the subsequent quarter. This action, despite signs of moderation in core inflation, postpones the benefits of lower borrowing costs critically needed for economic activities,” stated Mr. Hussain.
Mr. Hussain emphasized that the central bank’s prioritization of averting second-order inflationary effects—namely, a spike in food prices and increased import demand due to crop damage from floods—will have severe consequences for Pakistan’s external and industrial sectors. “The continued high interest rate is an immediate roadblock to economic recovery. High borrowing costs make local products non-competitive, a factor that will inevitably lead to a contraction of exports and a decline in the industrial climate in the country,” he asserted.
As the country faces the challenge of an inflating trade deficit, Mr. Hussain, a former Provincial Minister Sindh for Information Technology, called for a decisive shift in economic policy to support the private sector—the engine of employment and growth. “For Pakistan to effectively counter an inflating trade deficit, the government must take immediate steps to reduce the cost of doing business. The primary levers are clear: we must aggressively reduce interest costs and energy tariffs.” For earning dollars through Exports and reducing trade deficit.
He concluded by urging the government and SBP to revisit their calibration, prioritizing the need to stimulate investment and production through monetary easing to ensure medium-term growth is not sacrificed for short-term price stability.
