‘Lower markup rate can help stimulate necessary economic growth’

FAISALABAD: A single-digit markup rate is imperative to stimulate necessary economic growth, increase borrowing, and reduce the debt burden, said Rehan Naseem Bharara, President, Faisalabad Chamber of Commerce & Industry (FCCI).

He said that decline in Consumer Price Index from 4.1 to 2.4 percent reflects that market has outperformed despite multiple challenges to continue its existing momentum further reduction in markup rate is necessary. He said that a single-digit markup rate would reduce the cost of borrowing for individuals, businesses, and the government.

“It would also lead to increased borrowing, investment, and consumption, which could stimulate economic growth”, he said and added that a lower markup rate could also make credit more accessible to small and medium-sized enterprises (SMEs), which are the backbone of Pakistan’s economy. He said that this could help them to expand their businesses, create jobs, and increase economic activity.

He said that the business community was continuously pressing to further trim the markup rate as it would reduce the debt burden on individuals, businesses, and the government. “This could also lead to a decrease in debt servicing costs and thus provide a breathing space to utilize national resources for other productive and nation building purposes”, he said and added that lower markup rate will also make Pakistani businesses more competitive in the global market. He further said that this could also help increase exports, reduce imports, and improve the trade balance.

The FCCI chief said that a single-digit markup rate could attract foreign investment, as well as encourage domestic investment. “This could also lead to increased economic activity, job creation, and growth”, he opined, adding that lower markup rate could further help in reducing inflation, as borrowing costs will decrease and the money supply will increase.

Copyright Business Recorder, 2025