The Lahore Chamber of Commerce and Industry (LCCI), on Friday, expressed concerns over the State Bank of Pakistan’s (SBP) decision to increase the policy rate to 16%. The chambers believe the move is a setback that will halt all attempts to lower the cost of doing business in the country, and will hit the government’s plan to increase exports.
According to LCCI President Kashif Anwar, Senior Vice President Chaudhry Zafar Mahmood, and Vice President Adnan Khalid Butt, “LCCI was anticipating a reduction in markup rates, however, the SBP took the opposite position and announced another increase.”
“Businesses are already in trouble because of Chapter 84-85 and now the increase in markup rate will add fuel to the fire,” said the LCCI officials in a statement.
“Without a doubt, the government is working hard to lower the cost of doing business, but it requires the backing of institutions for its policies,” they said, adding that, “The increase in the markup rate has resulted in the highest borrowing costs in six years.”
“How will the industry in Pakistan compete with the likes of France, Germany, Spain, Austria, Ireland, Japan and various other countries where the markup is zero or below zero,” they asked.
The LCCI office-bearers suggested that the markup rate be reduced to single digits in order to boost economic activities and ensure affordable financing for the industrial sector.
“A high markup rate is not sustainable; it is harming the economy severely and will continue to do so until a realistic approach is adopted,” they warned.
Published in The Express Tribune, November 26th, 2022.
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