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Islamabad, The former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr. Shahid Rasheed Butt, has called for a reduction in fuel and electricity prices, as well as interest rates, citing the improving economic situation in Pakistan.
According to Islamabad Chamber of Commerce and Industry, Dr. Butt on Thursday asserted that these reductions would provide relief to the public and stimulate economic activities. He highlighted the satisfaction of the International Monetary Fund (IMF) and other international organizations with Pakistan’s financial condition, noting the controlled deficits and the disruption of the “dollar mafia.”
Dr. Butt urged the State Bank of Pakistan (SBP) to reduce interest rates without further delay, pointing out that the SBP has not lowered key interest rates since June. This reluctance is attributed to the central bank’s commitment to price stability, despite high headline and core inflation readings, falling reserves, fragile exchange rate stability, and unsuitability for monetary easing at the current time.
Policy makers are concerned that a cut in interest rates could lead to a surge in imports, quick depletion of reserves, impact on the exchange rate, and an expansion of the current account deficit.
The business leader credited the IMF with rescuing Pakistan’s economy from bankruptcy and commended the performance of the investment council under military supervision. He emphasized the need for the government to prepare for another IMF program amid election preparations. Dr. Butt warned that without at least two years of IMF supervision, politicians might lead the country towards bankruptcy again.
He criticized the politicians’ consistent mismanagement of the economy, suggesting that it takes five to seven years for the economy to recover from such problems. However, he cautioned that without controlling corruption and wasteful spending for short-term popularity, even the IMF might not be able to save the country.
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