Industry Chief Calls for Aggressive Rate Cuts to Boost Economy

KARACHI: Ahmed Azeem Alvi, president of the SITE Association of Industry, expressed dissatisfaction with the State Bank of Pakistan’s recent decision to reduce the policy rate by 100 basis points. Alvi urged the central bank to slash the rate into single digits to rejuvenate business confidence and stimulate economic growth.

Alvi articulated his concerns in a statement, explaining that a single-digit policy rate has been a persistent demand from the business community. He noted that the current reduction is insufficient to foster meaningful economic improvement. “If the policy rate enters single digits, it will significantly boost business confidence,” Alvi stated, emphasizing the psychological impact of such a move.

The industrial leader highlighted that high borrowing costs are inhibiting industrial expansion, as businesses struggle to access affordable credit. “At current rates, access to affordable credit remains a major hurdle for industries,” he emphasized, underlining the challenges faced by the business sector.

Alvi expressed optimism that the next monetary policy could potentially lower interest rates to single digits, which he believes would restore business confidence. He suggested that reasonable loan rates would enable businesses to expand, sparking positive economic effects.

In his appeal to policymakers, Alvi stressed the urgency of a more substantial rate reduction. He warned that without significant relief, industrial growth and broader economic recovery would continue to lag.