FPCCI calls for 5% immediate cut in policy rate

ISLAMABAD: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh expressed concerns over the country’s current monetary policy, highlighting dissatisfaction among the business, industry, and trade communities. Sheikh criticized the policy for maintaining a significant premium above core inflation, which he believes is hindering economic progress.

In a statement, Sheikh pointed out that inflation in Pakistan is at its lowest in nine years, with the government's own data showing inflation at 1.5% in February 2025 and 2.4% in January 2025. Despite this, the policy rate remains high at 12%, reflecting a significant 1050 basis points premium above core inflation.

After consulting with various industries and sectors, FPCCI has called for an immediate, single-stroke reduction of 500 basis points in the upcoming Monetary Policy Committee (MPC) meeting, scheduled for March 10, 2025.

The business body emphasizes the need for a more rationalized monetary policy, one that aligns with the Special Investment Facilitation Council (SIFC) vision and supports the Prime Minister’s goals of boosting economic and export growth.

Sheikh further noted that industry estimates predict core inflation to remain between 1–3% in the fourth quarter of FY25, driven by declining prices and easing inflationary pressures.