ABAD Calls for Interest Rate Reduction to Revitalize Economy

The Association of Builders and Developers (ABAD) has appealed to the State Bank of Pakistan (SBP) to lower the interest rate to a single digit. This measure is intended to stimulate investment and revitalize the nation’s economic condition.

The Monetary Policy Committee (MPC) is set to convene its initial meeting for the fiscal year 2025-26 on Wednesday, July 30, 2025. During its previous assembly on June 16, the central bank’s MPC opted to maintain the policy rate steady at 11%.

According to an ABAD statement, chairman Muhammad Hassan Bakshi stated that the existing 11% interest rate is restricting commercial activities nationwide, dissuading private investment, and causing economic progress to stall.

He cautioned that, in the absence of structural modifications to the monetary policy, Pakistan might encounter significant difficulties, including a drawn-out recession, growing unemployment, and a decline in industrial output.

Bakshi noted that while numerous economies globally are decreasing interest rates to encourage expansion, Pakistan’s unrealistic monetary strategy is crippling its economy and undermining domestic industries.

The ABAD chairman emphasized that the construction sector, which directly and indirectly employs millions of people and promotes over a hundred related industries, cannot thrive under the present interest rate environment.

Bakshi contended that a reduction in the interest rate would unlock private capital, render housing finance more accessible, and stimulate activity across diverse economic sectors.

Concurrently, the association also urged the government to take immediate steps to restore investor trust, stabilize economic policy, promote the expansion of the real estate sector, and implement regulations that are favorable to builders.

The ABAD chairman asserted that if Pakistan aspires to compete regionally and draw in investment, it must harmonize its financial and economic strategies with actual circumstances.