A prominent business leader today voiced deep apprehension over the State Bank of Pakistan’s (SBP) decision to maintain the benchmark policy rate at 11.00%, cautioning that the persistence of high financing costs presents a significant peril to the nation’s industrial expansion and export competitiveness.

Mian Zahid Hussain, a leading figure in Pakistan’s business community, criticized the central bank’s “highly cautious approach.” He argued that while the SBP’s Monetary Policy Committee (MPC) cited external uncertainties and renewed inflationary pressures from severe monsoon floods as its rationale, the decision places an excessive burden on the country’s commercial sector.

“The decision to hold the policy rate steady means high financing costs for businesses will persist into the subsequent quarter,” stated Mr. Hussain. “This action, despite signs of moderation in core inflation, postpones the benefits of lower borrowing costs critically needed for economic activities.”

Mr. Hussain, who holds multiple leadership roles including President of the Pakistan Businessmen and Intellectuals Forum, emphasized that the central bank”s focus on preventing secondary inflationary effects from food price hikes and flood-related import demand will have severe repercussions for Pakistan’s industry.

“The continued high interest rate is an immediate roadblock to economic recovery,” he asserted. The business magnate noted that elevated borrowing costs render local products non-competitive, a factor he believes will inevitably trigger a contraction of exports and a deterioration in the country’s industrial climate.

As the nation grapples with a widening trade deficit, Mr. Hussain, a former Provincial Minister for Information Technology, called for a fundamental shift in economic strategy to bolster the private sector. “For Pakistan to effectively counter an inflating trade deficit, the government must take immediate steps to reduce the cost of doing business,” he proposed. “The primary levers are clear: we must aggressively reduce interest costs and energy tariffs.”

He concluded with an urgent appeal to the government and the SBP, urging them to recalibrate their policies. Mr. Hussain stressed the importance of prioritizing monetary easing to stimulate investment and production, ensuring that long-term growth is not sacrificed for short-term price stability.