The Federation of Pakistan Chambers of Commerce and Industry has strongly rejected the State Bank of Pakistandecision to raise the policy rate by 1 percent, warning the move could trigger industrial closures, reduce exports, and slow economic recovery.
FPCCI President Atif Ikram Sheikh described the rate increase as ill-timed and damaging, arguing it comes just as Pakistan’s economy was showing signs of stabilization. He said continued monetary tightening could severely hurt struggling industries and undermine growth prospects.
The business body argued that high borrowing costs conflict with the government’s objectives of economic revival, export expansion, and job creation, while also making Pakistani products less competitive in regional and global markets.
FPCCI officials maintained that Pakistan’s inflation is driven more by energy prices and supply chain constraints than demand pressures, adding that higher interest rates would increase business costs, restrict private-sector credit, and accelerate de-industrialization.
Senior Vice President Saquib Fayyaz Magoon warned that small and medium enterprises may face serious financing difficulties, while Vice President Abdul Mohamin Khan said industries, especially in Sindh, are already operating below capacity and could face layoffs and stalled expansion plans.
The FPCCI urged the government and central bank to reconsider the monetary policy stance and instead focus on reducing energy and borrowing costs while broadening the tax base.
