High interest rates hurting business growth, SMEs and exports, says UBG
KARACHI, SEPT 8 /DNA/ – President of the United Business Group (UBG) and leader of the ruling bloc in the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Zubair Tufail, has urged the State Bank of Pakistan (SBP) to bring down the policy rate to single digits in the upcoming monetary policy announcement on September 15.
In a press statement issued by UBG’s central spokesperson, Gulzar Firoz, Tufail expressed concern over the persistently high interest rate of 11%, stating that it continues to discourage private sector borrowing and investment. “The business community was disappointed by the SBP’s last monetary policy decision to maintain the rate at such a high level, despite clear economic indicators supporting a cut,” he said.
Tufail warned that without a substantial reduction in the policy rate, the country’s economic revival would remain sluggish. He noted that Pakistan’s interest rate remains one of the highest in the region, far above those of China, India, Vietnam, Thailand, and Bangladesh — making Pakistani exports and industries less competitive in the global market.
“The high cost of borrowing is severely impacting small and medium enterprises (SMEs), which form the backbone of our economy,” he stated. “Exporters and local businesses are under immense pressure due to the unaffordable cost of financing, limiting their growth and global competitiveness.”
Tufail emphasized that the current macroeconomic environment, particularly the record-low inflation rate, provides enough room for a significant cut in the interest rate. He urged the SBP’s Monetary Policy Committee to make decisions based on ground realities and support the revival of industrial activity, employment generation, and overall economic growth.
