Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), Sheikh Umer Rehan, has welcomed the State Bank of Pakistan’s decision to reduce the policy rate by 100 basis points, bringing it down to 11%. However, he warned that while the move signals economic relief, it falls short of what is needed to stabilize and revive the country’s industrial sector.

“This rate cut is a step in the right direction, but it is not enough,” said Sheikh Umer Rehan. “Pakistan’s productive sector is under severe pressure due to rising costs, weakening consumer purchasing power, and limited access to affordable finance. The modest reduction in interest rates may restore some business confidence, but it will not be sufficient to fuel new investments, industrial expansion, or job creation.”

Rehan emphasized that global indicators—including a declining trend in inflation, stable food commodity prices, and reduced import pressures—warranted a bolder move by policymakers in Pakistan. “The State Bank should have acted more decisively and pushed the policy rate into single digits to ease constraints on industrial growth,” he added.

He particularly highlighted the challenges faced by the food manufacturing sector, including the ghee and cooking oil industries, which struggle with high financing costs. “These costs ultimately trickle down to the end consumers. A meaningful reduction in interest rates would not only lower production expenses but also create room to pass on benefits in the form of reduced prices,” he stated.

Rehan urged the central bank to chart a clear policy path toward lower interest rates to promote industrial expansion and economic recovery. He concluded by saying that true economic relief can only be realized through stronger, investment-friendly monetary reforms.