The industrialists have expressed dissatisfaction over the State Bank of Pakistan’s (SBP) decision to cut the interest rate to 2 percent, calling the decision inadequate.

Junaid Naqi, the President of the Korangi Association of Trade and Industry (KATI), has emphasized that inflation, now at 4.9 percent – lowest in six years – warrants a much larger reduction in policy rates to single digits.

Naqi argued that the improving economic indicators, including the strengthening of foreign exchange reserves, the appreciating rupee, and a current account surplus, create a strong case for deeper cuts to support economic growth.

He noted that inflation had declined faster than the State Bank’s projections, dropping from 7.2 percent to 4.9 percent.

Adding that the business community had consistently advocated for single-digit interest rates to help spur industrial growth and boost economic activity.

He highlighted that the current high policy rate has significantly slowed economic momentum and constrained industrial activities.

A further reduction in interest rates, he argued, is essential to enable industries to access affordable credit, address capital shortages, and stimulate industrial expansion.

The KATI president stressed that a lower interest rate regime would not only revive local industries but also provide much-needed relief to the export sector, helping it compete more effectively in global markets.

He urged policymakers to adopt a forward-looking approach to interest rates to unlock the full potential of Pakistan’s industrial and economic sectors.