Karachi Chamber of Commerce and Industry (KCCI) has expressed dissatisfaction with the State Bank of Pakistan’s decision to slash the policy interest rate by a mere 1 percent. This adjustment, which places the rate at 11 percent, has been deemed insufficient by KCCI President Muhammad Jawed Bilwani, who argues it falls short of the business community’s expectations for an economic revival.

Despite acknowledging the rate cut as a positive move, Bilwani criticized it as inadequate, especially in light of Pakistan’s current economic conditions. He pointed out that the unprecedented low inflation rate, which plummeted to 0.3 percent in April 2025, according to the Pakistan Bureau of Statistics, should have prompted a more significant reduction in interest rates. Such a high real interest rate is seen as a deterrent to investment, production, and employment opportunities.

Bilwani compared Pakistan’s scenario with other regional economies, highlighting that despite the lowest inflation, Pakistan’s borrowing costs remain among the highest. Countries like India, Bangladesh, Vietnam, and Thailand have lower policy rates, actively fostering their business environments, whereas Pakistani industries continue to grapple with steep financing costs.

The KCCI President further emphasized the severe impact on small and medium enterprises (SMEs), which he described as the backbone of the nation’s economy. The high cost of borrowing is crippling their global competitiveness and stifling growth, he noted, urging for an interest rate that aligns with the economic needs.

Bilwani reiterated the chamber’s call for a single-digit interest rate, stating it is vital to unleash the potential of Pakistan’s industrial and export sectors, spur job creation, and draw in both local and foreign investment. He affirmed KCCI’s readiness to collaborate with policymakers to establish a more supportive and business-friendly economic landscape.