KARACHI: Business community has termed high interest rate disastrous for industries, SMEs. Irfan Iqbal Sheikh, President of the apex body, FPCCI, has categorically termed the monetary policy as the worst in country’s economic history; and, has predicted that it will bring the economic, trade, investment and commercial activities on a standstill – a doomsday scenario for the business, industry & trade community of Pakistan.

Irfan Iqbal Sheikh highlighted that Pakistan now ranks one of the lowest in access to finance and cost of doing business indices in almost the entire region; and, instead of consulting the business community, the government has continued their tradition of consultation-less policymaking; consequently, ignoring the real stakeholders of the economy.

FPCCI Chief has apprised that now commercial banks would not lend to the businesses for anything less than 22.5– 23 percent interest rates; and, no business can find it affordable anymore. This will result in the complete drying up of the private-sector lending from the banking or formal sectors; which already has been availed only by approximately 7 percent of the businesses over the past many years, he added.

Irfan Iqbal Sheikh has proposed that the entire business community has to start a national-level campaign to persuade all political parties to sign a comprehensive, non-political, legally-binding and long-term charter of economy aimed at ensuring continuity in economic, fiscal, taxation, trade, industrial, investment, agricultural & food, IT & Telecom, energy and SME policies for the next 15 years.

Suleman Chawla, SVP FPCCI, added that, coupled with the historical hike in the policy rate, the government has also abruptly withdrawn the subsidy to the 5 export-oriented sectors on power tariff – which are already burgeoned under the current abysmal ease of doing business environment & investor sentiment in the country. How the mainstay of Pakistani exports, i.e., textiles & allied products, can even repeat FY22’s export performance of $19.3 billion after these anti-industry & anti-exports measures, he added.

Pakistan Yarn Merchants Association (PYMA) has expressed deep concern over the sudden 3% increase in interest rates by the State Bank of Pakistan on the advice of the IMF, calling it disastrous for the industries, especially the SMEs.

Copyright Business Recorder, 2023