KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday opposed the central bank’s decision not to change interest rates for the third time, saying the rates are too high compared to neighboring countries. Is more
Anjum Nisar, chairman of the FPCCI’s ruling group Businessmen Panel, said a reduction in interest rates was necessary to make the export sector and local industry competitive.
He said that Pakistan should take advantage of canceled export orders by regional countries. For this, the government has to reduce production costs to take advantage of this opportunity.
Nisar said lower demand was likely to reduce inflation. He added that the external front is also currently sustainable due to foreign financial assistance and debt recovery, which has supported the reduction of the current account deficit.
The industrialist said most economic activity figures and indicators of consumer and business sentiment have continued to improve. Inflation is expected to be in the range of 7-9% previously announced for FY21 and 5-7% in the medium term.
Nisar said that manufacturing recovery is becoming more broad-based, 12 out of 15 sub-sectors have registered positive growth in November and employment recovery will begin. Discussing the external sector, he said that the outlook for the external sector has further improved and the current account deficit for FY21 is now likely to be below one per cent of GDP.
He added that exports have already reached COVID’s monthly level of about 2 2 billion since September, with a massive recovery in export volume recorded in almost all categories in December.
Nisar said the reduction in electricity tariffs for small and medium enterprises was the first step towards cutting production costs while the second and most important step in this direction would be to bring discount rates at the regional level, especially to the export industry. To provide level playground.
He added, “This decision will be of equal importance to the domestic industry, as it is facing stiff competition for cheap imports in the country following free trade agreements with several countries, including China.”
“Reducing interest rates will be a huge relief for the business community.” Nisar said that the SBP should take steps and formulate strategies to save the pace of economic and trade development, otherwise the country would again face low industrial growth and industrial units would be shifted to ailing industries. ۔ “Reducing interest rates will be a significant relief for the business community.”