Mr. Atif Ikram Sheikh, President FPCCI, has apprised that the business, industry and trade community of Pakistan is disappointed with the monetary policy as it continues to be based on a heavy premium vis-à-vis Consumer Price Index (CPI) and the State Bank of Pakistan (SBP) has maintained status quo in the policy rate in its Monday meeting.
Mr Atif Ikram Sheikh highlighted that the CPI, as per the government’s statistics, stood at 3.50 per cent in May 2022, but the policy rate continues to be 11.0 per cent as of today – which reflects a premium of 750 basis points (bps) compared to inflation. It makes no economic sense, he added.
Mr. Atif Ikram Sheikh continued that, after deliberations from the apex trade and industry platform with all industries and sectors, FPCCI had demanded a single-stroke rate cut of 400 basis points during Monday’s monetary policy committee (MPC) meeting to rationalize the key policy rate; and, align it to the vision of special investment facilitation council (SIFC) – and, the Prime Minister’s vision for industrial development, import substitution and export growth.
FPCCI Chief noted that the CPI is expected to be in the range of 2–4 per cent for June and July 2025, based on trade, industry, and economists’ expectations. Therefore, he had demanded the key policy rate should have been brought down to 7 per cent with the proposed reduction of 400 bps in today’s monetary policy decision.
Mr Sheikh reiterated the apex body’s stance that the cost of doing business, ease of doing business, and access to finance in Pakistan are the lowest compared to its competitors in the export markets. Fortunately, the decisive downward trend in inflationary pressures has been continuing for the past many months, and the only viable solution to get back on the economic growth trajectory is to support industry and exports, he added.
Mr Saquib Fayyaz Magoon, SVP FPCCI, proposed that the interest rate should be reduced to single digits immediately to enable Pakistani exporters to some extent compete in regional and international export markets by lowering the cost of capital in a meaningful way.
