KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Jawed Bilwani has termed the State Bank of Pakistan’s decision to reduce the policy rate by 1 percent, bringing it down to 11 percent, as a positive yet inadequate step toward economic revival.
In a statement issued on Monday, KCCI Jawed Bilwani emphasized that the cut does not meet the expectations of the business community, which has been persistently calling for a substantial reduction to bring the interest rate into single digits.
He highlighted that the current macroeconomic environment, especially the record-low inflation rate, provides ample room for a deeper policy rate cut. Referring to Pakistan Bureau of Statistics data, he said, Pakistan’s inflation has dropped to a historic low of 0.3 percent in April 2025, from 0.7 percent in March which shows that the real interest rate is excessively high, stifling investment, production, and job creation.
Drawing a comparison with regional economies, Bilwani pointed out that Pakistan’s interest rate remains among the highest, despite having the lowest inflation. “India’s policy rate is at 6.0 percent, Bangladesh at 10.0 percent, Vietnam at 3.0 percent, and Thailand recently cut its rate to 1.75 percent. These countries are actively supporting their business sectors, while Pakistani industries continue to suffer under unsustainably high borrowing costs,” he added.
He further stressed that small and medium enterprises (SMEs), the backbone of Pakistan’s economy, are being disproportionately affected. “SMEs and exporters are facing immense challenges due to the high cost of financing, which undermines their global competitiveness and limits growth. The current policy stance does not align with the urgent needs of our economy.”
“We reiterate our demand for a single-digit interest rate regime. Only then can we unlock the true potential of our industrial and export sectors, generate employment, and attract domestic and foreign investment”, he stressed, adding that KCCI stands ready to engage with policymakers to help shape a more growth-oriented and business-friendly economic framework.