KARACHI: Faraz-ur-Rehman, Patron-in-Chief of the Pakistan Business Group (PBGO) and Chairman of the Pakistan Business Guild, has urged the government to slash the policy rate by 500 basis points in one go during the upcoming monetary policy announcement. He stated that this decisive move is essential for reviving the economy and fostering a business-friendly environment.
Urgent Need for a Policy Shift
Faraz-ur-Rehman stressed the importance of immediate action, warning that delays would further harm the economy. He highlighted the critical need to bring the policy rate to single digits, which he said is already under consideration. “A sharp cut in the policy rate will not only stimulate economic activity but also align with the government’s broader economic goals,” he remarked.
Benefits of Lowering the Policy Rate
He explained that reducing the policy rate would lower bank lending rates, making borrowing more affordable for businesses and consumers. This, in turn, would encourage investments, boost economic activities, and contribute to sustainable growth.
Improving Inflation Figures
Faraz-ur-Rehman pointed to recent data showing a significant drop in the Consumer Price Index (CPI) for November 2024, which fell to 4.9% year-on-year (YoY) from 7.2% in October. He described this decline as a clear indicator of improving economic conditions and credited the government’s strategic planning and the resilience of the business sector for this positive trend.
Opportunity for Economic Stabilization
The patron-in-chief emphasized that the current low inflation provides an ideal opportunity for the government to reduce borrowing costs. He urged policymakers to act swiftly, saying, “Timely action will signal stability and demonstrate the government’s commitment to effective policy implementation.”
Commitment to Economic Recovery
Faraz-ur-Rehman assured that the PBGO remains dedicated to supporting policies that drive economic recovery. He pledged to collaborate with government officials, industry leaders, and international partners to ensure continued progress.
Advocacy for Reforms
“We will continue advocating for reforms that boost business growth and improve living standards for all Pakistanis,” he concluded, reiterating his commitment to promoting a stable and prosperous economic environment.
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