Islamabad Chamber of Commerce & Industry (ICCI) has shown concerns over the double digit inflation, which is taking a heavy toll on poor people as well as on the business activities and urged the government to take urgent remedial measures to bring it down to single digit level.

Mr.Zahid Maqbool, President, ICCI said that a robust and steady economic growth depends on the performance of key macro-economic factors such as inflation and interest rate. Unfortunately, both these indicators in Pakistan have moved up putting more strains on economic growth of the country.

He said that SBP has raised the benchmark discount rate from 12.50 to 13.00 percent with main objective of controlling rising inflation. However, a peep in the past trend shows that tight monetary policy remained unsuccessful in its goals as it has not contributed positively in taming inflation.

He said that rather the tight monetary policy has proved more harmful for the growth of business activities as it enhanced the cost of doing business and made credit facility more costly for private sector. He said that due to recent hike in interest rate, the lending of commercial banks has also gone up making things tougher for business enterprises.

He said that rising inflation will continue to adversely affect business entities and the general public in many ways as the increase in prices negatively impacts investment, savings, money value, employment and the purchasing power of general public.

Mr.Zahid Maqbool said that government should take urgent measures to bring stability in inflation trend because a stable inflation rate raises the prospects of safe and sound growth.

He said that China has now become the 2nd largest economy of the world overtaking Japan. The main reason of China’s phenomenal growth was that it mostly kept its inflation in single digit ranging from 5 per cent to 6 per cent.

ICCI President said that steady growth is only possible if the economy is protected from the fluctuating effects of inflation. He said that government needs to play a more comprehensive role in taming inflation by reducing its spending and borrowings, as the central bank’s tightening of interest rates will have little impact on checking price rise.