KARACHI: Johar Ali Qandhari, the newly elected President of the Korangi Association of Trade and Industry (KATI), has expressed deep concern over the decision by the State Bank to maintain the interest rate at a high of 22 percent.

Qandhari warned that such a move would have severe consequences for industries, potentially leading to their destruction. Qandhari emphasized that the current interest rate poses a significant obstacle to achieving economic goals and contributes to inflation and a decline in the country's growth rate.

He pointed out that industries are grappling with reduced growth due to high debt, and existing businesses are struggling to sustain operations with interest rates ranging from 24 to 25 percent. This, in turn, has led to the closure of some operational industries.

The President of KATI highlighted that Pakistan's interest rate is notably higher than that of its regional counterparts, leading to increased inflation and unemployment. He underscored that the business community has been consistently urging a reduction in interest rates for several months. He called on the government to swiftly address the issue by reducing the interest rate to single digits. He stressed that this reduction is crucial to boost industrialization by providing access to affordable loans.

Qandhari argued that with more accessible financing, the industrial cycle would accelerate, exceeding the State Bank's current growth expectations of 2 to 3 percent, and consequently, leading to an increase in tax revenue.

Copyright Business Recorder, 2024