The Pak International Business Forum (PIBF) has strongly condemned the recent increase in the policy rate by the State Bank of Pakistan, terming the decision detrimental to industrial growth and overall economic stability. In a statement issued on Tuesday, PIBF President Dr. Mushtaq Mangat said the hike in interest rates has come at a highly challenging time for the business community, which is already grappling with multiple cost pressures. He pointed out that persistently high petroleum (POL) prices, elevated electricity tariffs, and increasing diesel costs have significantly raised the cost of production and transportation across industries. “The government should have focused on easing the financial burden on businesses rather than further tightening monetary conditions,” he remarked. Dr. Mangat warned that expensive borrowing would discourage industrial expansion and delay new investments, ultimately slowing down economic activity. He added that higher financing costs would not only affect large-scale manufacturing but also severely impact small and medium enterprises (SMEs), which depend heavily on bank credit for working capital. General Secretary Muhammad Ejaz Tanveer stated that the increase in interest rates would translate into higher cost of doing business, making Pakistani products less competitive in both domestic and international markets. “Industries are already operating under thin margins due to rising input costs. Additional financial burden in the form of higher interest rates will force many businesses to scale back operations or postpone expansion plans,” he said. He further cautioned that such policy measures could trigger a chain reaction, leading to reduced production, lower exports, and potential job losses. “At a time when economic revival is crucial, policies that restrict liquidity and increase costs can have long-term adverse consequences,” he added. Chief Organiser Muaz Qazi echoed these concerns, highlighting that the combined impact of high energy prices, fuel costs, and expensive credit is placing unsustainable pressure on the industrial sector. He noted that rising diesel prices have already increased transportation costs, further adding to supply chain inefficiencies and overall business expenses. “The industry is being squeezed from all sides. Without immediate relief measures, we risk witnessing a slowdown in industrial output, reduced investor confidence, and rising unemployment,” he warned. PIBF urged the government and policymakers to take urgent, business-friendly measures, including rationalizing energy tariffs, stabilizing fuel prices, and ensuring affordable access to credit. The forum emphasized that a balanced and growth-oriented policy approach is essential to support industry, encourage investment, and steer the economy towards sustainable recovery.
