The business and industrial sectors expressed frustration on Monday following the State Bank of Pakistan’s (SBP) decision to keep the policy rate unchanged at 11%. Industry leaders called the move “anti-growth,” arguing it would hinder business sentiment and economic progress.
Muhammad Rehan Hanif, president of the Karachi Chamber of Commerce and Industry (KCCI), echoed similar concerns, calling the decision a missed opportunity to offer relief to the business community. He had hoped for at least a 200-basis-point reduction, bringing the rate closer to 9%, noting that the current rate, while lower than the previous high of 23%, remained burdensome for businesses facing rising operational and energy costs.
Hanif reminded that the government had promised to reduce interest rates to single digits by the end of 2024, a pledge that has yet to be fulfilled. He stressed that businesses, already grappling with high utility tariffs, cannot afford the high borrowing costs.
Muhammad Ikram Rajput, president of the Korangi Association of Trade and Industry (KATI), criticised the SBP for leaving the rate unchanged for the fourth consecutive Monetary Policy Committee meeting.
Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), stated that the decision did not align with current economic conditions and could discourage investment.
He pointed to the 5.6% inflation rate in September 2025 and suggested that lowering the policy rate to around 7% could stimulate growth and ease the government’s debt burden by Rs3.5 trillion.
Sheikh also highlighted that Pakistan’s interest rates are significantly higher than those in neighboring countries, which, he said, was stifling economic activity. He urged policymakers to reduce the rate to single digits to improve business competitiveness.
Salim Valimuhammad, chairperson of the Pakistan Chemicals and Dyes Merchants Association (PCDMA), called the decision a major setback, emphasizing that it undermined efforts to revive the economy.
Similarly, Ahmed Azeem Alvi, president of the SITE Association of Industry, expressed disappointment, warning that continued high rates would further erode industrial confidence.
