Karachi, April 27, 2026 – Khurram Ijaz, General Secretary of the Businessmen Panel Progressive (BMPP) and former Vice President of Federation of Pakistan Chambers of Commerce and Industry, has strongly criticized the recent increase in the policy rate by the State Bank of Pakistan, calling it counterproductive for economic growth.
The central bank, in its today’s Monetary Policy Committee (MPC) meeting, raised the benchmark interest rate to 11.50% from 10.50%. Khurram Ijaz said this decision has missed an important opportunity to support trade and industry at a time when businesses are already under severe pressure. He stressed that instead of increasing the rate, the authorities should have considered reducing it to encourage investment and economic activity.
He said the rate hike would have a negative impact on the business community, especially when industries are already facing high costs of doing business. According to him, Pakistani businesses are competing with regional economies where interest rates are much lower, making it difficult for local industries to survive and grow.
Ijaz explained that inflation in Pakistan is mainly driven by factors such as high energy prices and supply chain issues, not excessive demand. Therefore, increasing interest rates will not effectively control inflation but will instead raise borrowing costs, reduce private sector investment, and slow down economic activity. He warned that such policies could lead to de-industrialization if not corrected in time.
He highlighted that small and medium enterprises (SMEs) would be the most affected by this decision. Higher interest rates will limit their access to affordable financing, forcing many businesses to scale down operations or shut down completely. He added that combined with high electricity tariffs and heavy regulatory costs, this situation could push many manufacturers toward default.
Ijaz also pointed out that the timing of the decision is particularly damaging, as global economic uncertainty is already affecting Pakistan’s trade and industry. He said that increasing rates during such conditions would further weaken business confidence and discourage new investments.
He emphasized that it is unrealistic to expect higher tax collection by the Federal Board of Revenue while simultaneously putting pressure on the productive sectors of the economy.
Khurram Ijaz urged policymakers to adopt a pro-growth approach by lowering interest rates, supporting industrial expansion, and creating jobs. He also called for better coordination between the government and the central bank, along with meaningful consultation with stakeholders.
He concluded that consistent and predictable economic policies are essential to restore investor confidence and ensure sustainable economic growth in Pakistan.