Karachi, December 15, 2025 — Pakistan’s business and industrial community has strongly rejected the State Bank of Pakistan’s (SBP) decision to reduce the policy rate by only 50 basis points, calling the move inadequate and out of sync with economic realities.
Leading trade bodies have urged the central bank to take bold action and slash interest rates to single digits to revive industrial activity, boost exports, and restore investor confidence.
President of the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Rehan Hanif, expressed deep disappointment over what he described as a “token cut,” stating that it provides no meaningful relief to businesses grappling with high costs. He noted that despite easing inflation, Pakistan’s borrowing costs remain among the highest in the region, severely hampering industrial growth, exports, and job creation. He highlighted that regional competitors such as China, India, Bangladesh, Vietnam, Indonesia, and Sri Lanka operate with single-digit interest rates, giving their industries a significant competitive edge.
Echoing similar concerns, President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, termed the 0.5 percent cut contrary to longstanding demands of the business community. He said that after seven months of a static policy rate, a reduction of at least 200–300 basis points was expected. According to him, high interest rates have made bank borrowing prohibitively expensive, discouraged investment, hurt SMEs, and undermined export competitiveness.
SITE Association of Industry (SAI) President Ahmed Azeem Alvi also criticized the marginal cut, warning that industries are already under severe strain due to high financing costs, stalled imports, and rising unemployment. He urged the government to move beyond IMF-driven caution and adopt business-friendly policies.
Meanwhile, Pakistan Chemicals & Dyes Merchants Association (PCDMA) Chairman Saleem Valimuhammad stressed that economic recovery is impossible without single-digit interest rates, calling for urgent measures to stimulate growth and stabilize the economy.
Collectively, industry leaders cautioned that unless SBP takes decisive steps to further reduce rates, economic stagnation, unemployment, and loss of competitiveness may persist.