LAHORE: As Pakistan navigates a delicate economic recovery, the Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) strongly urge the State Bank of Pakistan (SBP) to reduce the benchmark interest rate from the current 11% to 6% in its upcoming Monetary Policy announcement on July 30, 2025.
Nazir Hussain, President Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) stated that with core economic indicators showing clear signs of stabilization including a significant drop in inflation and a subdued Consumer Price Index (CPI), PCJCCI believes the time is ripe for a more accommodative monetary stance to unlock the country’s full economic potential.
He added that Pakistan’s macroeconomic conditions now justify a bold policy shift; Headline inflation has fallen to 4%, indicating improved price stability, CPI growth stands at just 0.3%, one of the lowest in recent years, meanwhile, the real interest rate is excessively positive, stifling borrowing, spending, and investment.
Brig Mansoor Saeed Sheikh (Retd), Senior Vice President PCJCCI said that a policy rate of 11% in a 4% inflation environment reflects an overly conservative posture that is dampening industrial sentiment. This mismatch between inflation and interest rates is hurting Pakistan’s ability to stimulate investment, create jobs, and foster industrial growth. He emphasized that a cut to 6% would trigger wide-ranging economic benefits, particularly for industries, SMEs, and foreign investors.
Key sectors, textiles, agriculture, construction, and manufacturing are struggling under the burden of high borrowing costs. Lower rates would; revive industrial capacity utilization, currently at historical lows, enable SMEs to access credit and expand operations, restore investor confidence in the domestic business.
Copyright Business Recorder, 2025
