Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), strongly criticized the State Bank of Pakistan’s decision to raise the policy rate by 0.5 percentage points to 12%, calling it a setback for economic recovery and business growth.

He said the higher interest rate will increase borrowing costs for businesses already facing rising utility tariffs, liquidity challenges, and operational expenses, while discouraging investment and industrial expansion.

The FPCCI chief maintained that inflation in Pakistan is largely driven by structural and energy-related factors rather than excessive demand, making further monetary tightening ineffective. He warned that persistently high interest rates are hurting manufacturing, exports, SMEs, and overall competitiveness.

Reiterating FPCCI’s stance, Atif Ikram Sheikh urged the government and the central bank to bring the policy rate down to single digits, stressing that affordable credit is essential for investment, value addition, job creation, and sustainable economic growth.