KARACHI: The Pakistan Business Forum (PBF) has urged policymakers to introduce attractive and consistent economic policies to facilitate such inflows and called on the government to adopt bold, growth-oriented policies.
“It is imperative to steer the economy toward growth.”
It said the business community stands ready to support the government, provided that a conducive and stable policy environment is ensured.
President PBF Khawaja Mehboob ur Rehman emphasised that Pakistan’s cost of doing business is already approximately 34 percent higher than that of regional competitors, placing local enterprises at a significant disadvantage.
“The business community had anticipated a move toward a single-digit interest rate, which would have boosted confidence among both domestic and foreign investors,” said the PBF President. “Instead, this decision risks discouraging investment at a critical time for economic recovery.”
He stated that the increase in interest rates will further constrain private sector borrowing, making it more difficult for businesses to expand and operate efficiently.
He highlighted that the recent increase in petroleum levy by Rs. 27 just days prior, followed by a 1 percent hike in the interest rate, signal a troubling policy direction. According to PBF, such measures suggest that the upcoming federal budget may rely heavily on additional taxation, further burdening businesses and consumers alike.
PBF President also raised concerns about the broader economic management framework, urging the government to clarify its strategy. “If economic decision-making is being driven by external institutions such as the International Monetary Fund (IMF), then the business community deserves transparency”.
Addressing currency concerns, he argued that, based on current foreign exchange reserves, the Pakistani Rupee should be closer to Rs. 240 against the US Dollar. It identified rapid currency depreciation as a key driver of economic instability and stressed that stabilising the rupee would resolve a significant portion of existing challenges. “The strengthening of the rupee is essential. Half of our economic problems could be mitigated through currency stability alone.”
PBF official further noted that this is an opportune moment for the government to encourage the repatriation of Pakistani capital held abroad, particularly from the United Arab Emirates.
Expressed strong concern and surprise over the recent increase in the policy interest rate announced in the latest monetary policy, the Forum questioned the government’s apparent shift away from its stated commitment to improving ease of doing business in the country.
However, Malik Khuda Bakhsh has sharply criticised the recent 100 basis point increase in the interest rate, warning that the decision risks deepening economic stagnation in the country.
He cautioned that further tightening of monetary policy could have serious repercussions for Pakistan’s already fragile economy.
Highlighting the fiscal implications, he noted that with government debt estimated at around Rs60 trillion, even a one percent rise in interest rates would increase the national interest burden by approximately Rs600 billion.
Khuda Bakhsh also expressed concern over the manufacturing sector, which is already under strain due to high borrowing costs. He pointed out that rising energy prices and the overall cost of doing business are compounding these challenges, significantly hindering industrial growth.
He further drew attention to a troubling wave of industrial closures nationwide, attributing it to the combined pressure of elevated interest rates and escalating energy costs.
Calling for immediate intervention, he urged policymakers to reverse the tightening of monetary policy to prevent further de-industrialisation and to support the private sector in sustaining economic activity.
Copyright Business Recorder, 2026
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