Low policy rate a must for industrial growth, says FRIA

LAHORE
Ferozepur Road Industrial Association (FRIA) Chairman and PIAF leader Shahbaz Aslam has said that a significant cut in the key policy rate is essential to revive economic activity, reduce the cost of doing business, and put the country on the path to sustainable industrial growth.
Shahbaz Aslam observed that while inflationary pressures have shown signs of easing and global commodity prices remain relatively stable, the present high interest rate continues to discourage investment and expansion in the industrial sector. He said that the business community was expecting the State Bank of Pakistan to adopt a more growth-oriented approach in its latest monetary policy, as a lower policy rate would help unlock the potential of both large industries and small and medium enterprises.
He explained that industrialists are already burdened by unprecedented electricity and gas tariffs, fluctuating exchange rates, and weak consumer demand. In such a situation, expensive credit makes it nearly impossible for manufacturers to upgrade technology, increase capacity, or compete in export markets. He stressed that SMEs, which generate the bulk of employment, have been particularly affected by the lack of affordable financing.
The FRIA Chairman said that an immediate reduction in the policy rate would send a positive signal to investors and traders, restoring confidence in the economy. He added that a lower cost of borrowing would encourage businesses to expand production, which in turn would create jobs, enhance exports, and broaden the tax base.
Shahbaz Aslam urged the central bank and economic managers to consider the challenges faced by industry and trade in their policymaking, rather than relying solely on tight monetary controls. He emphasized that a balanced approach—combining inflation management with measures to stimulate growth—is vital for Pakistan’s economic recovery.
He reiterated that the business community is ready to contribute to national development, provided the policy environment supports competitiveness, lowers input costs, and facilitates investment in value-added sectors.