During a talk on the topic of improving Pakistan’s economy, the Rawalpindi Chamber of Commerce and Industry (RCCI) stressed the need for the government to align the interest rate with regional economies and reduce input costs to create a more competitive and conducive environment for domestic industries to grow and further flourish. RCCI President, Saqib Rafiq, said that the rising interest rates, soaring inflation and massive currency devaluation have eroded purchasing power which has resulted in industries becoming less competitive. Unfortunately, Pakistan has the highest interest rate in the region at 22%, compared to Malaysia’s at 3%, China’s at 3.45%, India’s at 6.5% and Bangladesh’s at 6%. He added “The manufacturing output of large industries shrank 15% year-on-year in June 2023 owing to the high cost of doing business. In addition, the 12-month period of FY2023 also shows an overall decline of 10.26%” The RCCI President further commented that the high-interest rates have discouraged industries including Small and Medium Enterprises ( SMEs) from making investments in new equipment, technology, or expansion projects. “High interest has always had negative consequences for trade, commerce, industrial output, industrial expansion and socioeconomic development,” he added. “It would be hard to compete with countries in the region such as India, Bangladesh and China in the presence of high-interest rates.” He urged the government to take the stakeholders on board and chalk out strategies to devise long-term policies for lowering the interest rate, cost of doing business and inflation. Published in The Express Tribune, March 20th, 2024.
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