Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain has expressed serious concerns over the reports of increase in interest rates by State Bank. In a statement issued on Wednesday, he said that interest rates were already so high that any further increase would prove disastrous for the economy. Mian Zahid Hussain said that the policymakers before making a decision in this regard should consider its implication. He said the central bank was considering increasing the interest rate from one hundred to one hundred and fifty basis points as it thinks it will help reduce inflation while also stabilising foreign exchange reserves.

However, the central bankers should also consider that the interest rate was raised to 22 percent in April and was not cut last month, which disappointed the business community, the business leader added. He said that a further increase of one or one and a half percent will make it impossible to do business for many, which will close many businesses and increase unemployment.

The move will also increase the burden of interest on the government, which is already 7200 billion rupees annually, he maintained. In the current situation of the country, it would be more beneficial to reduce interest rates than to raise them, as businesses are in a bad state, unemployment is high, and bank defaults are also increasing rapidly, he noted. Mian Zahid Hussain said that new trade agreements were being made between international powers in our neighbourhood. Western nations and Arab countries were increasing trade by ignoring the open violation of human rights in India, while Pakistan was playing the role of a silent spectator instead of being a part of this whole issue, which was a sign of poor management.

The G20 meeting in India has proved that the world was more interested in trade than ethics, and if we want to be valued and heard, sloganeering will no longer work, but trade will. He said that concrete measures will have to be taken to increase the exports of the country, without which the economy cannot become stable. No one in the world cares about a bankrupt country, no matter how big the consumer market was or whether it is armed with nuclear weapons. Mian Zahid Hussain further said that in these circumstances, the establishment of SIFC was a ray of hope, and it was necessary to enhance the role of the private sector in order to achieve its goals.

Credit: Independent News Pakistan (INP)