Business bodies reject 50bps rate hike

Pakistan’s business associations have opposed the State Bank of Pakistan’s 50-basis-point increase in the policy rate to 12%, The Express Tribune reported. Representatives of the Federation of Pakistan Chambers of Commerce and Industry, Korangi Association of Trade and Industry, Karachi Chamber of Commerce and Industry, and SITE Association of Industry said higher financing costs could weigh on production, investment and exports.

The groups pointed to existing pressures including costly energy, taxes, raw materials and limited access to affordable credit. FPCCI President Atif Ikram Sheikh called for the rate to be reduced to single digits, while KATI President Sheikh Umer Rehan said the increase could deter capacity expansion and new projects. KCCI President Talat Mahmood and SITE Association President Abdul Hadi also warned that more expensive borrowing could add to manufacturers’ costs and strain businesses already facing financial pressure.

The business representatives argued that inflation also reflects energy prices, supply constraints and fiscal issues, and urged policymakers to pursue measures beyond monetary tightening. Their response highlights the tension between controlling inflation and sustaining industrial activity.