SCCI urges govt to slash interest rates for economic growth

PESHAWAR: Sarhad Chamber of Commerce and Industry (SCCI) president Fazal Moqeem Khan on Thursday urged the government and the State Bank of Pakistan to reduce interest rates to single digits, citing the need for economic growth and business expansion.

In a statement issued here, Moqeem said that despite Pakistan’s inflation rate dropping to a nine-year low - recording 2.4percent in February 2025 and 2.8percent in January 2025 - the policy rate remains significantly high at 12percent. “This reflects a 1050 basis points premium above core inflation,” he added. He maintained that global oil prices have remained stable, and both the power division and the government have recommended reducing energy prices, further indicating a decline in inflationary pressures.

The SCCI chief stressed the need for taking concrete measures to revive the economy, improve the ease of doing business, promote industrial and trade activities, and ensure the provision of soft loans. He said that high interest rates and energy costs had made running businesses and industries increasingly difficult, rendering Pakistan’s exports uncompetitive in the global market.

“The business community is struggling due to the prevailing circumstances, and the lack of industry growth is a result of the government’s unfriendly policies,” he went on to add.Moqeem called for a substantial reduction in the policy rate in line with the Special Investment Facilitation Council’s vision and ground realities to boost economic growth and enhance exports. He pointed out that industry estimates predict core inflation to remain between 1-3percent in the fourth quarter of FY25, driven by falling prices and easing inflationary trends.