KARACHI: The SITE Association of Industry (SAI) has expressed strong dissatisfaction over the State Bank of Pakistan’s (SBP) recent decision to cut the benchmark policy rate by just 1%, terming the move inadequate and disconnected from the economic needs of the industrial sector.
SAI has reiterated its long-standing demand to reduce the rate to a single-digit level in order to revive industrial activity and restore business confidence.
In a statement issued on Monday, SAI President Ahmed Azeem Alvi voiced the business community’s growing frustration with the central bank’s conservative monetary stance. “A single-digit policy rate has been our persistent demand, yet it appears our concerns continue to fall on deaf ears. This token 1% cut will have no substantial impact on investment or industrial growth,” Alvi stated.
He added that high borrowing costs are a major constraint for manufacturers, especially in Karachi’s SITE industrial zone, one of the country’s largest industrial estates. According to Alvi, the elevated rate has made it extremely difficult for businesses to access affordable credit, stifling growth and limiting expansion opportunities.
“Industries need breathing room to grow. If the rate continues to hover in double digits, we can’t expect any real economic momentum,” he warned. “A psychological shift occurs when the rate drops into single digits—confidence returns, and industries begin to invest again.”
The SAI chief stressed that industries across Pakistan are in desperate need of policy support, particularly during a period of economic uncertainty. He urged the government and SBP to act decisively in the next monetary policy announcement and reduce the policy rate to a level that reflects ground realities.
Alvi concluded by saying that unless bold steps are taken to make credit affordable, industrial output will remain stagnant and Pakistan’s economic recovery will continue to falter. He called on economic policymakers to align fiscal and monetary strategies with the needs of the productive sector.