KARACHI: The Pakistan Vanaspati Manufacturers Association (PVMA) Chairman, Sheikh Umer Rehan, praised the State Bank of Pakistan’s decision to cut the policy rate by 100 basis points to 11%. However, he cautioned that this measure alone is insufficient to stabilize and revive the industrial sector.

Sheikh Umer Rehan remarked, “This rate cut is a step in the right direction, but it is not enough.” He elaborated on the pressures that Pakistan’s productive sector faces, such as rising costs, declining consumer purchasing power, and limited access to affordable finance. He noted that while the interest rate reduction might boost business confidence slightly, it falls short of sparking new investments, industrial growth, or job creation.

Rehan pointed to global trends like decreasing inflation, stable food commodity prices, and reduced import pressures as indicators that Pakistan’s policymakers should have made a more decisive move. “The State Bank should have acted more decisively and pushed the policy rate into single digits to ease constraints on industrial growth,” he stated.

He also drew attention to the challenges confronting the food manufacturing sector, particularly the ghee and cooking oil industries, which grapple with high financing costs. Rehan explained that these costs ultimately impact consumers, and a meaningful interest rate reduction could lower production expenses, allowing for price reductions.

Rehan called on the central bank to establish a clear policy direction toward lower interest rates to encourage industrial expansion and economic recovery. He concluded by asserting that significant economic relief requires stronger, investment-friendly monetary reforms.