High Interest Rates Hinder Investment, Warns FPCCI Vice President

Karachi: The Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Muhammad Aman Pracha, has called on the federal government to reduce the policy rate by up to 300 basis points, emphasizing the need for such a move to spur economic growth.

In a statement, Aman Pracha highlighted that cutting the policy rate could enhance economic prosperity, benefiting all sectors. He stressed the urgency for the State Bank of Pakistan to implement at least a 3 percent reduction in the interest rate during its upcoming monetary policy meeting, asserting that such a measure is crucial for further economic progress.

Pracha explained that a 300 basis points reduction would boost economic activity and strengthen investor confidence. This, in turn, would attract foreign investment, which he noted is essential for the country’s economic health.

He also pointed out a significant decline in the Consumer Price Index (CPI), viewing it as evidence of the business community’s resilience. Pracha argued that a timely reduction in interest rates would signal improved economic stability, making it easier for both businesses and consumers to access loans.

The FPCCI Vice President further stated that lower interest rates would stimulate investment, increase economic activities, and contribute to the nation’s prosperity.

Pracha expressed concern over reports that the interest rate might remain unchanged at 11 percent, suggesting such news is spreading disappointment amid already low levels of local and foreign investment in Pakistan.