KARACHI: Despite Prime Minister Shahbaz Sharif's assurances, the failure to implement a significant reduction in the interest rate is a matter of concern, says Ahmed Azeem Alvi. He added that high-interest loans are hindering economic recovery and discouraging investment.

According to a statement by SITE Association of Industry, Ahmed Azeem Alvi, President of the organization, expressed deep disappointment over the modest 1% reduction in the interest rate. He described this decision as a significant impediment to economic recovery.

The statement, released on Monday, highlighted the business community's concerns over the State Bank of Pakistan's reluctance to implement a substantial reduction in interest rates, despite a continuous decrease in inflation. This hesitation, Mr. Alvi warned, is likely to deter investor confidence and slow down business activities.

Mr. Alvi emphasized the business community's demand for interest rates to be reduced to single digits. He argued that a reduction of at least 1.5% should have been made, which would lower the rate to 10% after subsequent cuts in future monetary policies.

Despite Prime Minister Sharif's repeated commitment to lowering interest rates, Mr. Alvi suggested that bureaucratic inertia might be hindering this goal. He urged the Prime Minister to take note of this issue, given its importance for economic recovery.

He also stated that if the State Bank continues to delay significant interest rate cuts, the potential positive impact on the economy will lessen over time. Mr. Alvi expressed hope that the central bank will engage with stakeholders and address the business community's demands in the next monetary policy, leading to a favorable economic outcome.

Source: S.I.T.E Association of Industry