PBF Karachi Division Advocates for Interest Rate Reduction

The President of the Pakistan Business Forum (PBF) Karachi Division, Malik Khuda Bakhsh, has appealed to the Monetary Policy Committee and the State Bank of Pakistan’s Governor to set the interest rate at 6 percent, aligning with the expectations of the business community.

Malik Khuda Bakhsh noted that the current CPI index for the nation is 0.3 percent, and inflation has decreased to 4 percent. He highlighted that the IMF has also suggested keeping interest rates near the inflation rate. According to him, Pakistan’s existing 11% interest rate is excessively high, which is detrimental for business operations. He argued that bringing the rate down to 6 percent is vital for revitalizing business activities.

He voiced his support for the appeal made by United Business Group’s Patron-in-Chief, S.M. Tanveer, to decrease the interest rate to 6 percent during the upcoming monetary policy announcement. He emphasized that the government is burdened with 8.5 trillion rupees in interest-bearing debts. Reducing the rate to 6 percent could lead to savings of approximately 3.5 trillion rupees, positively influencing the economy, particularly industries grappling with substantial interest rates and electricity expenses.

He further commented that a decrease in interest rates could enhance the global competitiveness of Pakistani exports, considering that international markets generally have interest rates ranging between 4–5 percent. He also voiced concerns about recent budgetary actions, such as Sections 37A and 37B, which authorize arrests and detentions, asserting that such measures impede business expansion.

Malik Khuda Bakhsh stressed the significance of fostering a conducive business environment and urged the government to reconsider policies that are in conflict with business interests. He suggested that the emphasis should instead be on establishing conditions that encourage growth, investment, and competitiveness.

The PBF Karachi Region President also mentioned that with inflation projected to stabilize at around 7% in the approaching quarters, a reduction in the rate would be advantageous. He stated that durable strategies are required to address financial obstacles and rebuild investor trust. He cautioned that growing imports and fragile financial inflows are putting strain on the external account, which calls for a careful strategy. Despite indications of economic recovery, the economy still needs reinforcement, and lowering the interest rate to a single digit (6 percent) is critical to make loans more accessible and promote industrial growth.