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RAWALPINDI, Jul 28 (APP): Usman Shaukat, President of the Rawalpindi Chamber of Commerce and Industry (RCCI), has urged the State Bank of Pakistan (SBP) to slash the policy rate to single digits in the upcoming Monetary Policy Committee (MPC) meeting.
In a statement issued here today, RCCI’s president emphasized that aligning Pakistan’s interest rates with those of regional economies is crucial to easing the mounting cost of doing business in the country.
Highlighting the disparity, Shaukat noted that borrowing costs in Pakistan are among the highest in the region, stifling business growth and discouraging investment.
“Interest rates in Vietnam stand at 6.3 percent, followed by Cambodia at 3 percent, Indonesia at 6 percent, and India at 5.5 percent,” he said.
He further pointed out that Pakistan’s competitiveness is severely undermined by steep energy costs. “Electricity tariffs in Pakistan hover around 16 cents per unit compared to 9 cents in Bangladesh, 8 cents in Vietnam, 10 cents in Cambodia and Indonesia, 7.2 cents in India, and just 5 cents in Sri Lanka,” he added.
Shaukat stressed that a reduction of at least 03 percent in the interest rate would provide vital relief to businesses, particularly small and medium-sized enterprises (SMEs), which are disproportionately burdened by high financing costs.
The RCCI President observed that Pakistan’s uncompetitive business environment is not only a result of high interest rates but also elevated electricity, gas, and water tariffs, steep taxation, and one of the highest minimum wages in the region, all coupled with low labour productivity.
“These elements must be rationalized to lower the cost of doing business,” he said.
He noted that industries are operating below capacity, new investments are stalled, and business confidence is at a low.
“Persisting with outdated monetary policies will only worsen unemployment, depress investment, and cause revenue shortfalls”, he added.
President concluded that saying RCCI reiterates its call for urgent monetary and structural reforms to revive industrial activity, attract investment, and enhance Pakistan’s regional competitiveness.