Business leaders criticise hike in interest rate

Karachi Chamber of Commerce & Industry President Talat Mahmood strongly opposed the State Bank of Pakistan's decision to raise the policy interest rate by 50 basis points, from 11.5% to 12%. He warned that the move would increase business costs, discourage private-sector investment, and hinder economic growth. Mahmood pointed out that inflation was mainly due to rising energy and fuel prices, geopolitical uncertainty, supply-chain disruptions, and higher commodity prices, rather than excessive domestic demand.

He added that increasing interest rates would add to businesses' burdens without tackling the root causes of inflation. North Karachi Association of Trade and Industry President Faisal Moez Khan also criticized the decision, stating it would damage ongoing efforts for economic stability and weaken Pakistan's competitive edge in global markets.

KATI President Sheikh Umer Rehan expressed disappointment, warning that the rate hike could strain industrial activity, business growth, and economic recovery, while also raising production costs and dampening export competitiveness. He suggested addressing economic pressures through other means, such as reducing energy costs, simplifying the tax system, and creating a more business-friendly environment.