RCCI Demands Interest Rate Alignment with Regional Economies

News Desk 

Rawalpindi: The Rawalpindi Chamber of Commerce and Industry (RCCI) has emphasized the need for the government to align the interest rates with those of regional economies and to reduce input costs.

This, they argue, would foster a more competitive and conducive environment for domestic industries to thrive and grow further.

In a press statement released on Sunday, RCCI President Saqib Rafiq highlighted that the increasing interest rates, alongside soaring inflation and substantial currency devaluation, have significantly diminished purchasing power.

As a result, industries are facing challenges in maintaining their competitiveness.

It is indeed regrettable that Pakistan currently maintains the highest interest rate in the region, standing at 22 percent, in stark contrast to Malaysia’s 3 percent, China’s 3.45 percent, India’s 6.5 percent, and Bangladesh’s 6 percent, RCCI Saqib Rafiq lamented.

Related: https://thepenpk.com/rcci-demands-immediate-steps-for-business-activities/

The consequences of this high interest rate are evident in the manufacturing sector, where the output of large industries saw a significant 15 percent year-on-year contraction in June 2023. This trend persisted throughout the fiscal year 2023, with an overall decline of 10.26 percent.

Highlighting the challenges faced by the business community, RCCI President emphasized that the exorbitant interest rates have discouraged both large industries and Small and Medium Enterprises (SMEs) from investing in new equipment, technology, or expansion projects.

High interest always has negative consequences for trade, commerce, industrial output, industrial expansion, and socioeconomic development, he added.

“It would be hard to compete with countries in the region such as India, Bangladesh and China in the presence of high interest rates,” he added.

He urged the government to take the stakeholders on board and chalk out strategies to devise long-term policies for lowering interest rate, cost of doing business and inflation.