LAHORE, October 28 —President of the Lahore Chamber of Commerce & Industry (LCCI), Faheem-ur-Rehman Saigol, has said that the State Bank’s decision to keep the interest rate at 11% is harmful for the economy. He said that the rate should have been reduced by at least 2% to boost business activities in the country.
In a statement, LCCI President Faheem-ur-Rehman Saigol, Senior Vice President Tanveer Ahmed Sheikh, and Vice President Khurram Lodhi said that the cost of doing business in Pakistan is already the highest in the region. Expensive financing has become a major obstacle to investment. Industries are unable to expand or upgrade their machinery due to high borrowing costs. The export sector is also under pressure and losing competitiveness in the international market. The localization process of local industries has slowed down, which negatively affects the goal of import substitution.
They said that global conditions had created some opportunities for Pakistan — such as the US imposing higher tariffs on India — but Pakistan could not benefit from them because economic policies are not aligned with private sector needs.
They added that after recent floods, agriculture and livestock sectors have suffered badly. Farmers and small businesses are facing serious challenges. In this situation, reducing the interest rate was necessary to revive economic activities and create jobs.
The LCCI President urged the government and the State Bank to bring the interest rate down to single digits immediately, so that investment increases, economic growth accelerates, and Pakistan can improve its competitiveness in the region.