ICCI slams hike in policy interest rate to 17 percent - Press Release issued by Islamabad Chamber of Commerce and Industry.

Islamabad -- January 24, 2023 (PPI-OT)

Following is the text of press release issued by Islamabad Chamber of Commerce and Industry (ICCI)

Quote

Ahsan Zafar Bakhtawari, President, Islamabad Chamber of Commerce and Industry (ICCI) said that due to the current economic crisis and high prices of electricity, gas and petroleum products, the business community is already facing great difficulties as the cost of doing business has increased manifold. In these unfavourable business conditions, the State Bank of Pakistan has further increased the interest rate to 17%, which will prove disastrous for business and investment activities besides further increasing inflation for the common man. He said that in order to revive the economy, Pakistan needs a boost in economic activities, but further increase in interest rates would make bank credit almost unaffordable for the private sector leading to further contraction in business activities.

Ahsan Bakhtawari said that hike in interest rate would also increase the budget deficit and foreign debt of Pakistan as according to a conservative estimate, one percent increase in the interest rate surges the foreign debt by 170 billion rupees. He said that interest rate in China is 3.65%, Bangladesh and Vietnam 6%and India 6.25%, but the 17% interest rate in Pakistan is higher in the region which would make our exports more uncompetitive in the international market.

He said the developed world including USA and Europe has kept the interest rate less than 5%, but in Pakistan, it has been increased to 17%, which would put the private sector at great disadvantage. He said that the business community of the entire country has always been demanding of the government to keep the interest rate in the single digit level in order to provide cheap credit...