PESHAWAR: Members of the business community urged the government and State Bank of Pakistan to cut interest rate to flourish industries, trade and businesses and improve the economy of the country.
The business community said prices of import items and raw materials increased exorbitantly owing to gradual increase in policy rate by the central bank, consequently cost of doing business also increasing and inflation also jacked up.
According to details, a meeting of businessmen was held under chairmanship of Industrialists Association Peshawar President Ayub Zakori in IAP office, said in a press release issued here on Saturday. Besides, IAP former presidents, executive members and senior members and industrialists, members of the business community were present on the occasion.
The participants of the meeting said that the further increase in policy rate will work under the prevailing scenario.
Ayub Zakori said the previous increase in policy rate to 22 percent has struck a mortal blow to an already struggling business community. The decision has further pushed up the cost of doing business and dampen prospects for reining in cost-push inflation, he added.
“At 25-26pc interest rate, it is hard to borrow from the banks,” he said, adding that it will be hard for the government to earn revenue due to decline in large-scale manufacturing. Participants of the meeting said it is very hard for business and industry to survive on high interest rates at a time when the soaring power and gas tariff had already pushed up the cost of doing business, making exports uncompetitive in the world market. Despite several rounds of negotiations between the government and the business community, no remedial measures have been proposed to spur industrialisation.
Instead, industries have been burdened with countless taxes and duties, the IAP chief said. “I don’t know where we will end up,” he added. “Inflation in Pakistan appears more entrenched which mainly stems from substantial exchange rate depreciation, unprecedented hike in international commodity prices, multiple rounds of hikes in energy tariffs and other measures prescribed under the International Monetary Fund (IMF) programme.” We are going up at a critical juncture for the economy, thus making the future more challenging.
The IAP chief said every sector of trade and industry is severely affected due to stoppage of imported goods; as a result the economy is going towards a total closure and default. He said many industries are now facing shortage of raw material and are on the verge of cutting their production. He said the current economic situation is very disturbing; SMEs and large-scale industry (LSM) are suffering from slowness.
The participants said production has stopped and operational expenses are also becoming difficult to meet, which has increased the fear of unemployment.
Copyright Business Recorder, 2024
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