Calls for relief from high power tariffs, heavy taxes for industrialists.
Says poor citizens are bearing the burden of expensive fuel.
Staff Report
ISLAMABAD: Chairman of National Business Group Pakistan, President of Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, Chairman of FPCCI’s Policy Advisory Board, and former provincial minister, Mian Zahid Hussain has urged the SBP to slash the policy rate to six percent, warning that the current 11 percent rate is highly detrimental to the business community, industry, and trade.
He acknowledged the gradual reduction in the interest rate but said the pace of cuts remains too slow due to the central bank’s excessive caution. Speaking to the business community, the veteran business leader noted that traders and industrialists are already grappling with the burden of expensive electricity, heavy taxation, and surging fuel prices. Commercial electricity tariffs range from Rs. 40 to Rs. 52 per unit, while industrial users are paying up to Rs. 40 per unit, significantly raising business costs and undermining competitiveness.
He stressed that further cuts in the policy rate are essential to provide some relief to businesses and the public, reduce unemployment, and boost exports. Bringing the interest rate down to six percent is crucial for economic growth and industrial output. He recalled that in October 2021, when inflation was in single digits, the policy rate stood at 7.25 percent. Therefore, with inflation back in single digits, there is a strong case for reducing the interest rate.
He also warned that under IMF conditions, electricity tariffs are expected to increase annually starting July 2025, with a similar hike in gas prices, further straining the public and private sectors. He called for swift and bold decisions to enable industrial recovery, noting that Pakistan’s electricity costs are escalating rapidly due to its direct link with rising fuel prices.
If the interest rate is not immediately reduced, the country’s economic growth will suffer serious setbacks. The current rate discourages investment and hinders the launch of new business ventures.
Mian Zahid Hussain urged the government and the State Bank of Pakistan to take the challenges of the business community seriously and adopt immediate and concrete steps to bring the interest rate down to six percent. He concluded that this is the only viable path to pulling the national economy out of crisis. Without decisive action, investor confidence will continue to erode, industrial stagnation will deepen, and Pakistan risks missing critical opportunities for export growth, employment generation, and long-term macroeconomic stability.
