High Interest Rate Criticized for Stunting Industrial Development

Karachi: The President of the United Business Group, Zubair Tufail, has voiced strong criticism against the State Bank of Pakistan’s decision to maintain its policy interest rate at 11 percent, describing it as a significant barrier to the expansion of domestic industries.

Tufail expressed that the business community has persistently appealed to the central bank for a reduction in the interest rate to a single digit, but their requests have remained unheeded. “The decision to maintain the rate contradicts the existing economic realities, deeply concerning business sectors,” he stated.

He pointed out that inflation has been largely stabilized, and given this context, a reduction in the interest rate by 2 to 3 percent was anticipated. “Overlooking these factors and keeping the rate unchanged is a surprising decision in light of the current economic climate,” Tufail remarked.

Tufail further suggested that if the Monetary Policy Committee found a significant reduction challenging, it could have at least implemented a one percent cut to bolster industrial growth and create job opportunities.

“The country’s industries are already struggling with high electricity and gas tariffs, which have increased the cost of doing business. They are unable to bear the additional burden of costly loans,” he cautioned.

Tufail concluded that the central bank’s decision could deter new investments and decelerate industrial advancement in Pakistan.