KARACHI – Industrialists have raised concerns over the inflationary trend resulting from high government borrowings from the central and commercial banks. “The industrial economy of the country is already struggling due to rising global commodity prices, energy shortages and the ever worsening security situation,” said a joint statement issued by SITE Association of Industry Chairman Abdul Wahab Lakhani, Senior Vice Chairman Asad Nisar and Vice Chairman Sanaullah Abdullah.
Industrialists said that increased government borrowings had discouraged the banking sector from lending to industrial enterprises. “Higher banking spreads and liquidity crunch is a result of increased government lending to overcome fiscal deficit,” they added. They claimed that the Rs 300 billion losses, incurred by state-owned enterprises (SOE) and a widening budget deficit, were spurred by mismanagement of economic and political managers.
“This inflationary trend has compelled the central bank to increase policy rates by 150 basis points in the past five months, which is hampering industrial growth of the country,” they said.
