The government’s intention regarding power tariff hike by four per cent would prove a serious blow to the efforts of State Bank of Pakistan (SBP) to contain inflation and maintain balance in the economy. However, the Islamabad Chamber of Commerce and Industry (ICCI) President Yassar Sakhi Butt has welcomed the State Bank of Pakistan (SBP) decision to cut discount rates by 150 basic points to 12 per cent from the existing 13.5 per cent.
“Considering the current economic slowdown, the SBP cut in the discount rate is an imperative move towards the revival of economy and the industry”, he said in a statement. In addition he said that banks should also ease out their strict conditions for taking credit facilities to support industrial sector and small scale enterprises. In order to promote industrial and economic growth, the Government and the SBP should cut the mark-up rate down to a single digit, he emphasised. ICCI President said that high markup rates and less availability of credit facilities for the private sector especially for setting up or reviving sick industrial units is hindering future investment.
Furthermore, the severe energy crisis and precarious law and order conditions continue to render domestic economic environment least conducive for productive activities. He lauded the Government decision to balance inflation and growth considerations through the expansionary monetary policy since tight monetary policy was not an appropriate solution to current economic problems. He proposed that Government should introduce a policy, offering different interest rates to different sectors depending on their contribution towards the national exchequer.
