Economy suffocating under high interest rate, needs urgent overhauling: Mian Akram Farid

ISLAMABAD ( WNAMREPORT ):  Mian Akram Farid, Chairman Central of the Employers’ Federation of Pakistan (EFP), and former Vice President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), voiced a grave concern over the escalating economic challenges gripping Pakistan. He warned that the nation’s economy is being stifled by exorbitant interest rates and crippling operational costs, leading to widespread business distress and an alarming unemployment rate. This critical situation, he emphasized, demands immediate and nuanced policy interventions to avert a deeper economic crisis and pave the way for sustainable growth.
Mr. Farid detailed the alarming indicators that characterize Pakistan’s current economic landscape. He pointed out that an exceptionally high policy rate of 11% is effectively choking businesses with prohibitive financing costs, thereby hindering investment and expansion. Furthermore, Pakistani businesses are burdened with financing costs that are double the regional average, placing them at a significant competitive disadvantage. The nation also faces a staggering unemployment rate, a crisis that necessitates urgent attention and comprehensive strategies to create jobs and stimulate economic activity. Adding to these burdens, electricity costs, ranging from 12-14 cents/kWh, are significantly higher than the regional average of 5-9 cents, further escalating operational expenses for businesses and households alike.
Mr. Farid emphasized, “We are at a critical juncture where conventional monetary policy is proving detrimental to our economic health. The current approach is suffocating businesses, stifling innovation, and leaving millions without livelihoods. We must recognize that the challenges are rooted in external shocks and demand a strategic shift in our economic management.”
Mian Akram Farid urges policymakers to re-evaluate the current economic strategy and adopt a more pragmatic approach. He specifically demanded that to provide immediate and tangible relief to the business and industrial community, the interest rate must be lowered to a single digit, ideally 7%. It is imperative, he stated, to implement a more nuanced monetary policy that prioritizes supporting businesses and fostering job creation, rather than solely focusing on interest rate hikes. Policymakers must also address the root causes of economic distress, including the impact of global price fluctuations and the burden of essential imports. Ultimately, the goal must be to foster a sustainable and equitable economic environment where businesses can thrive, and citizens have access to opportunities.
“We must work together – government, businesses, and civil society – to demand a monetary policy that actively supports the revival of our economy and secures the future of our workforce,” added Mr. Farid. “The time for conventional, stifling measures is over; it is time for a policy that truly empowers growth and stability.”