Business community demands reduction in interest rate

SBP and GoP urged to make sure that industries flourish

PESHAWAR, Jan19: Members of the business community urged the government and State Bank of Pakistan to cut interest rates to make sure that the industries flourish. 

The business community said that the prices of import items and raw materials increased exorbitantly owing to gradual increase in policy rate by the central bank, consequently cost of doing business also increased and inflation also jacked up.

A meeting of businessmen was held under the chairmanship of Industrialists Association Peshawar president Ayub Zakori in the IAP office. The aforementioned demands were made in a press release issued here on Friday. 

On this occasion, IAP’s former presidents, executive members, senior members and industrialist members of the business community were present.

The participants of the meeting said that the further increase in policy rate will work under the prevailing scenario. 

Ayub Zakori said that the previous increase in policy rate to 22% has struck a mortal blow to an already struggling business community. 

The decision has further pushed up the cost of doing business and dampen prospects for reining in cost-push inflation, he added. 

“At 25-26 % interest rate, it is hard to borrow from the banks,” he said, adding that it will be hard for the government to earn revenue due to the decline in large-scale manufacturing.”

Participants of the meeting said it is very hard for business and industry to survive on high interest rates at a time when the soaring power and gas tariff has  already pushed up the cost of doing business, making exports uncompetitive in the world market.

Despite several rounds of negotiations between the government and the business community, no remedial measures have been proposed to spur industrialisation. Instead, industries have been burdened with countless taxes and duties, added the IAP chief.

The IAP chief also said that every sector of trade and industry is severely affected due to the stoppage of imported goods. As a result the economy is going towards a total closure and default. 

Ayub Zakori said many industries are now facing shortage of raw material and are on the verge of cutting their production. 

The participants added that production has stopped and operational expenses are also becoming difficult to meet, which increases the fear of a rise in unemployment rates.

Aziz Buneri
Aziz Buneri
Aziz Buneri covers financial, social, political and regional issues for Pakistan Today and Profit. He can be reached at [email protected]

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