Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman has urged the State Bank of Pakistan (SBP) to reduce the discount rate by 1% in the forthcoming monetary policy.
He said the SBP continues to operate a tight monetary policy despite clear evidence that such policy strangulates investment and trade activities, hampering the growth of the manufacturing sector in Pakistan. The sector growth has begun to recover but it is still low due to high manufacturing cost and lower bank credits to the private sector.
Usman expressed his concern over the lower lending. “It is unfortunate that public money in commercial banks is being utilised to finance the fiscal deficit which is creating a saving- investment gap in the economy,” he said.
The leading economists of the country say that a widening saving-investment gap leads to several economic problems including unemployment, inflation and disinvestment.
Published in The Express Tribune, July 13th, 2014.
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