Prominent business leader and Patron-in-Chief of the United Business Group (UBG), S.M. Tanveer, has called for an immediate 500 basis points reduction in the interest rate, citing a significant drop in inflation from 38% to 6.9%.
In a statement, S.M. Tanveer said that the interest rate should be further reduced to 8% by January 2025, as easing business conditions has become a necessity due to the overall improvement in economic indicators.
He noted that a comparative review of Pakistan's macroeconomic indicators from June 2023 to September 2024 shows a clear improvement in the economic situation, with further positive signs expected following the approval of a package by the International Monetary Fund (IMF) Executive Board. He emphasized that the statistics show considerable economic improvement and stability, which highlights the efforts of Prime Minister Shehbaz Sharif’s government and the establishment of the Special Investment Facilitation Council (SIFC).
S.M. Tanveer also warned that additional steps are needed to stimulate limited business activities, stressing that the interest rate should be in single digits and electricity tariffs should be reduced.
He mentioned that the economic indicators and the IMF package are sufficient to increase demand, urging the government to ensure a business-friendly environment to promote investment, job creation, and growth in businesses and exports in the country.
It is noteworthy that economic data reveals an increase in GDP from 0.29% to 2.38%, with a projection of 3.9% for 2025. Similarly, the trade deficit has decreased from $27.47 billion to $24.09 billion, and the current account deficit has shrunk from $2.55 billion to $0.68 billion.
Additionally, exports have risen from $27.7 billion to $30.6 billion, with agricultural exports particularly increasing from $4.7 billion to $7.1 billion. Information technology (IT) exports have grown from $2.6 billion to $3.2 billion, while remittances have increased from $27.3 billion to $30.2 billion.
Over the past year, foreign direct investment in the country has also grown from $1.63 billion to $1.9 billion.
Furthermore, from June 2023 to September 2024, inflation has dropped from 38% to 9.6%, the interest rate has decreased from 22% to 17.5%, and the value of the dollar has fallen from 333.5 PKR to 278 PKR, showing an improvement in the value of the Pakistani rupee.
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