Muhammad Shakeel Munir, President, Islamabad Chamber of Commerce & Industry (ICCI) said that the policy interest rate was already higher in Pakistan compared to regional countries and the SBP has made unprecedented hike of 150 basis points in it in one go taking it to 8.75 percent that would badly affect the growth of business activities and stall the efforts to revive the economy. He said this while addressing a reception hosted by a renowned businessman Asif Iqbal in honor of ICCI Office Bearers. Jamshaid Akhtar Sheikh Senior Vice President, Muhammad Faheem Khan Vice President ICCI, Baser Daud, Sheikh Amir Waheed, Engr. Azhar ul Islam, Muhammad Naveed Malik, Ashfaq Chatha, Malik Najeeb, Zeeshan Ajmal, Muhammad Azam and others were present at the occasion.
Muhammad Shakeel Munir said that the the policy interest in Singapore was reportedly 0.22%, Thailand 0.5%, Hong Kong 0.86%, South Korea 1%, Malaysia 1.75%, Indonesia 3.5%, China 3.85%, India & Vietnam 4%, Bangladesh 4.75% and Sri Lank 5%, but in Pakistan it was 8.75%, which clearly showed that Pakistani business sector was facing the highest interest rate in the region. He said that the hike in policy interest rate will increase the cost of doing business, make lending to the private sector costlier, halt the expansion & growth of businesses and discourage new investment besides affecting investment in various projects. He urged that the government should reconsider this decision to save the economy from further troubles.
Jamshaid Akhtar Sheikh, Senior Vice President ICCI cautioned that such measures will give rise to hunger & unemployment and reduce revenue as scarcity of gas and high credit cost will drag the GDP down. He said that this move will leave a negative impact on the growth of industrial activities besides creating more difficulties for the SMEs, who were still struggling to combat the impact of Covid-19 pandemic. He urged that the government should withdraw the hike in interest rate in the larger interest of the economy.
Muhammad Faheem Khan, Vice President ICCI said that Pakistan needed a quick revival of business and industrial activities to improve the ailing economy which endured a slowdown due to the Covid-19 pandemic. However, the raise in the interest rate would make the credit cost unaffordable for the business community and affect the government’s efforts to promote the economy. He urged that the government should take another look at this decision to save the economy from further troubles.
The business community present in the reception said the government was facing pressure on the fiscal front as the current account deficit was on the rise while the increase in the interest rate would further swell the budget deficit creating more problems for the economy. They stressed that the government should engage the business leaders in the consultation process to devise a new strategy for steering the economy out of the current troubles.