Atif Ikram Sheikh, President of FPCCI, has expressed dissatisfaction with the recent monetary policy adjustment, which resulted in a modest reduction of 100 basis points by the State Bank of Pakistan (SBP). The business, industry, and trade community had anticipated a more significant reduction to align with core inflation rates.

According to a statement by Federation of Pakistan Chambers of Commerce and Industry today, the current inflation rate is 4.1 percent as of December 2024, yet the policy rate remains at 12.0 percent. This disparity highlights a premium of 790 basis points over core inflation, prompting demands for a more substantial 500 basis point cut.

Sheikh emphasized that the FPCCI’s demand for a single-stroke rate cut aimed to rationalize the monetary policy in line with the vision of the Special Investment Facilitation Council and the Prime Minister’s economic growth objectives. He noted that core inflation is projected to be between 3 to 4 percent in January 2025.

The FPCCI president also pointed out the stability in international oil prices, a significant factor in Pakistan’s inflationary pressures. He urged the authorities to abandon regressive and contractionary monetary practices in favor of supporting business growth.

Saquib Fayyaz Magoon, Senior Vice President of FPCCI, suggested reducing the interest rate to single digits to enhance Pakistani exporters’ competitiveness. He also advocated for revising electricity tariffs and renegotiating power purchase agreements to alleviate financial burdens on industry and consumers.

The FPCCI has continuously questioned the government’s approach to economic policymaking, urging transparency and consultation. They seek clarity on measures related to the IMF program and steps to expedite economic growth, emphasizing the need for government engagement with the business community.