President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Wednesday said the economy is getting better therefore the central bank should consider reducing the interest rates to trigger growth.

The policy rate has become a hurdle in the development and it is choking the economic activities, he said.

Mian Zahid Hussain said that policy rate is 13.25 percent, therefore, banks are giving loans at above 17 percent interest rate which has made business impossible.

Talking to the business community, the veteran business leader said that last year the interest rate was 6.5 percent therefore the business community borrowed Rs394.8 billion from July to November which dipped by 71 percent during the current fiscal to Rs88.1 billion.

The former minister noted that high interest rates are leading to high rates of defaults of businesses which has also resulted in concerns among bankers.

He said that banks are preferring investing in government papers where profit is good and investment is safe which is good for both parties but it is hampering economic activities.

He noted that the dependence of the government on banks continue to increase which will prove damaging for the economy as the private sector would be crowded out.

Mian Zahid Hussain noted that industrial production has gone down by six percent while the foreign investment in the construction industry has been reduced by 97 percent which should be noticed.