The central president of Pak International Business Forum (PIBF), Dr Mushtaq Mangat, and its central secretary general, Muhammad Ejaz Tanveer, have expressed concern over the State Bank of Pakistan’s decision to increase the policy rate from 11.5 per cent to 12 per cent, warning that higher interest rates could adversely affect business activity, industrial production, investment and the services sector. In a joint statement, the PIBF leaders said the increase in the policy rate would raise borrowing costs for businesses, potentially increasing production expenses, discouraging fresh investment and slowing industrial expansion. Small and medium-sized enterprises (SMEs), in particular, could face greater financial pressure due to expensive credit and limited access to affordable financing. They observed that Pakistan’s economy needed a revival of business confidence, higher industrial output, export growth and the creation of new employment opportunities. In such circumstances, expensive financing could make it more difficult for manufacturers and traders to meet working capital requirements, procure raw materials and invest in modern machinery. The resulting pressure could extend beyond industry and trade to transport, construction and other services-related sectors. Dr Mushtaq Mangat and Muhammad Ejaz Tanveer said controlling inflation remained an important economic objective; however, monetary policy should strike a balance between price stability and the need to promote economic growth, investment and employment. They stressed that sustainable economic stability also required fiscal discipline, greater control over government expenditure, stable energy prices, lower production costs and improvements in supply chains. The PIBF leaders urged the government and the State Bank to take the business community’s concerns into account and pursue a balanced economic strategy that reduced the cost of financing for the private sector, strengthened industrial capacity, promoted exports and restored investor confidence. They said Pakistan’s sustainable economic development depended on a strong industrial base, vibrant commercial activity and a conducive investment climate. Economic stabilisation measures, they added, must go hand in hand with policies that sustain business activity, encourage productive investment and support long-term economic growth. *Dr Mushtaq Mangat* Central President Pak International Business Forum (PIBF) *Muhammad Ejaz Tanveer* Central Secretary General Pak International Business Forum (PIBF).
