The Federation of Pakistan Chambers of Commerce and Industry has strongly rejected the recent decision by the State Bank of Pakistan to increase the policy rate by 1 percent. The business body warned that the move could harm economic growth.
The SBP decision has raised concerns among industrialists and exporters. FPCCI leaders said the timing of the increase is not suitable for the economy.
FPCCI President Atif Ikram Sheikh called the decision ill-timed and unfortunate. He said the economy was just starting to recover after stabilization efforts.
He added that Pakistan does not need strict monetary tightening at this stage. According to him, such policies could slow down growth and investment.
The FPCCI also warned the SBP that high interest rates could damage industry and exports. It said this approach makes local products less competitive globally.
Business leaders argued that repeated monetary tightening could lead to industrial slowdown. They said access to affordable credit is already limited.
Atif Ikram Sheikh said inflation is mainly driven by energy prices and supply chain issues. He added that higher interest rates will not solve these problems.
Instead, he warned that SBP policies could increase the cost of doing business. This may also reduce private sector borrowing.
FPCCI Senior Vice President Saquib Fayyaz Magoon said small and medium enterprises will suffer the most. He said many SMEs depend on affordable financing.
He warned that rising costs and high interest rates together could force factories to shut down. This would also impact employment levels.
FPCCI Vice President Abdul Mohamin Khan said industries in Sindh are already under pressure. He added that many factories are operating below capacity.
He also warned that the SBP decision may lead to layoffs and canceled expansion plans.
The business body urged the government and SBP to reconsider monetary policy direction. It recommended reducing energy costs and improving the tax system instead.
FPCCI also called for policies that support economic recovery. It said stable growth requires lower borrowing costs and stronger industrial support.
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Business leaders believe coordination between the government and SBP is necessary. They said balanced policies can help stabilize the economy and protect jobs.
