FPCCI for further reducing policy rate to support economic growth

LAHORE: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Regional Chairman and Vice Zaki Aijaz has called on the government to support economic growth by reducing the policy rate by 500 basis points in the upcoming Monetary Policy announcement on Monday. He emphasized that the interest rate should be brought down to single digits by January.

The FPCCI has already rejected the winter package, stating that it will not benefit the industry. Instead of offering Rs26 per unit for additional consumption under the winter package, the industry would benefit more if the government provided electricity at Rs10.94 per unit. He urged the government to review the winter package immediately.

Zaki Aijaz stressed that the Maximum Demand Indicator (MDI) charges should be abolished, as they represent an unnecessary burden on the industry.

In a press conference at the FPCCI Regional Office in Lahore, he stated that a significant reduction in the policy rate would not

only stimulate economic activity but also benefit the government.

He further noted that unnecessary delays result in losses to the country’s economy, especially when the government is already considering reducing the policy rate to single digits. Taking timely action, he argued, would lead to improved economic stability and showcase the effectiveness of recent policy measures. The FPCCI Regional Chief emphasized that a substantial rate reduction is urgently needed to bring bank mark-up rates back to single digits, making credit more affordable for both businesses and consumers. He pointed out that lower interest rates would encourage investment, stimulate economic activity, and contribute to the nation’s overall prosperity.

Zaki Aijaz also mentioned that inflation, as measured by the Consumer Price Index (CPI) had already decreased to 4.9% year-on-year in November, down from 7.2% in the previous month.

Meanwhile, Sardar Usman Ghani, Central Chairman, Pakistan Hardware Merchants Association, has urged the State Bank to play its role in bringing the economy back on track by immediately reducing the Monetary Policy by 500 points. He said that government economists and stakeholders agree to bring the interest rate to single digit, so State Bank should not delay in reducing it. The sooner the interest rate comes to a single digit, the sooner the confidence of investors will increase and the ongoing political chaos due to unemployment and inflation in the country will end, which will help the government to complete its economic and political agenda and the country will be able to continue on the journey of economic development.

Copyright Business Recorder, 2024