Pakistan’s industrial and export sectors are facing severe damage from unsustainable financing and energy costs, a top business leader warned today, demanding the government implement an immediate policy rate cut of at least 100 basis points to single digits.
In a statement, Saqib Fayyaz Magoon, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), argued that with inflation now declining, the government has the necessary fiscal space to provide urgent relief to the beleaguered commercial sector.
Mr Magoon pointed out that the significant reduction in inflation, which has now entered the single-digit range, was a widely anticipated development. He asserted this creates a clear opportunity for the authorities to lower the cost of finance and alleviate the immense pressure on industry and trade.
He was of the view that the cost of doing business has reached an unmanageable level and that a reduction in financial costs is now more feasible as inflationary pressures have eased. He reiterated the business community”s long-standing call for the policy rate to be brought down without delay.
The FPCCI official also highlighted the crippling effect of energy prices, noting that electricity tariffs in Pakistan are amongst the highest in the region. This, he explained, has led to a sharp escalation in production costs for local manufacturers.
Mr Magoon cautioned that the combination of elevated power tariffs and high interest rates is severely eroding the competitiveness of Pakistani products in international markets, which is directly harming the nation”s export performance.
He concluded that if the government is serious about making local products competitive globally and boosting exports, a significant cut in the cost of finance is essential. Such a move, he added, would support industrial expansion, encourage new investment, and contribute to the country”s overall economic stability.