Business Leader Urges Central Bank to Slash Interest Rate

Karachi: Mian Zahid Hussain, a prominent figure in Pakistan’s business community, has called on the State Bank of Pakistan to reduce the policy interest rate to six percent. He warned that the current 11 percent rate poses significant challenges to industry and trade.

Hussain, who holds several key positions including Chairman of the National Business Group Pakistan and President of the Pakistan Businessmen and Intellectuals Forum, highlighted the burdens faced by traders and industrialists. These include high electricity tariffs, heavy taxation, and increasing fuel costs, all of which elevate business expenses and reduce competitiveness.

He emphasized the necessity for further rate cuts to alleviate pressure on businesses and the public, suggesting that a lower rate would help reduce unemployment and boost exports. Hussain noted that with inflation now in single digits, as it was in October 2021 when the policy rate was 7.25 percent, there is a strong argument for a substantial rate reduction.

Hussain also cautioned that under conditions set by the International Monetary Fund, electricity and gas prices are set to rise annually from July 2025, further affecting both public and private sectors. He urged the government to make decisive moves to support industrial recovery, given the close relationship between electricity costs and fuel prices.

Without an immediate reduction in the interest rate, Hussain warned that Pakistan’s economic growth could face significant setbacks. He stressed the importance of swift action to maintain investor confidence, prevent industrial stagnation, and seize opportunities for export growth and employment.

In closing, Hussain urged the government and the State Bank to address the concerns of the business community by adopting concrete measures to lower the interest rate. He asserted that this step is crucial for pulling the national economy out of its current crisis and ensuring long-term stability.