Economy is at a turning point; effective measures are needed for rapid growth.
Interest rates cut essential to provide relief to the public and business community.
(www.thenewslark.com) (May-02-2025)
The Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, and the President and former provincial minister, Mian Zahid Hussain, said on Friday that the national economy is currently at a critical juncture.
He said immediate and effective measures are needed for rapid development; therefore, the State Bank of Pakistan should significantly reduce the interest rate.
Mian Zahid Hussain said that reducing the interest rate would boost business activity, increase the growth rate, create employment opportunities for the public, and benefit the government while reducing the burden of public debt.
Talking to the business community, the veteran business leader said that high interest rates adversely affect the economy. They make access to loans difficult for businesses and limit investment opportunities. The industrial sector suffers when interest rates are high and consumers’ purchasing power declines.
Pakistan’s GDP growth has remained below expectations in recent years, mainly due to high interest rates that increase business costs. He said that if the State Bank reduces the interest rate, the private sector will gain access to cheaper loans, and new investment opportunities will open up, especially for small and medium enterprises (SMEs), which are the backbone of Pakistan’s economy and are in dire need of affordable financing.
The business leader said the current interest rate is unbearable for SMEs, preventing them from enhancing their production capacity or investing in new projects.
Mian Zahid Hussain suggested that the central bank cut the interest rate by at least three percent to stimulate economic activity, support businesses, create new employment opportunities, and increase the public’s purchasing power, thereby reducing inflationary pressure.
He acknowledged that some experts fear a reduction in interest rates could fuel inflation. However, if the rate cut is carried out balanced alongside other policies, the situation can be controlled. Targeted subsidies and tax incentives could support the productive sectors in this regard.
He emphasized that reducing interest rates would be a bold decision, but caution is also necessary to ensure that financial stability is not jeopardized. Strict policies are also a major obstacle to economic recovery.
Mian Zahid Hussain concluded that the economy requires new resolve and policy reforms. The State Bank should consider the demands of the business boost while business people want a cut in the policy rates, enabling the beginning of a new era of economic growth. He said this step would stabilize the national economy and help Pakistan advance in the global economic race.
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