Karachi, September 6, 2024 – The Korangi Association of Trade and Industry (KATI) on Friday issued an urgent call for a reduction in interest rates, citing the recent drop in inflation. KATI President Johar Qandhari emphasized the need for a 4% cut in interest rates to align with the current inflation rate, which stands at 9%.
In his statement, Qandhari urged the State Bank of Pakistan (SBP) and the government to promptly act on this matter. He highlighted that lower interest rates are essential for stimulating economic activity, particularly at a time when businesses are struggling with high borrowing costs. A reduction in rates, according to him, would encourage businesses to invest, expand operations, and create new jobs, which are vital for economic growth.
Qandhari stressed that the interest rate cut would provide much-needed support to both small and medium enterprises (SMEs) as well as larger industries. “SMEs are the backbone of our economy, and lower interest rates would allow them to access affordable financing, which is crucial for their survival and growth,” he said. The KATI Chief added that reduced borrowing costs would allow businesses to focus on innovation, expansion, and boosting production, ultimately leading to a more resilient economy.
Furthermore, the KATI President emphasized the impact that lower interest rates would have on consumer spending. With reduced rates, individuals would have more disposable income, potentially increasing demand for goods and services. This, in turn, would contribute to a faster economic recovery, benefiting a wide range of industries.
The call for action comes as Pakistan continues to grapple with economic challenges, including inflationary pressures and a tight monetary policy. While inflation has recently shown signs of easing, KATI believes that swift and decisive action by the SBP and the government is essential to ensure sustained economic recovery.
Qandhari concluded by urging authorities to act immediately, stating, “The time for action is now. A reduction in interest rates will not only benefit businesses but also improve the overall well-being of citizens across the country.” He reiterated that timely intervention is critical to maintaining the momentum of recovery and helping Pakistan’s economy return to a path of growth and stability.
