The Abbasi and Company's Chief Operating Officer Muhammad Ishaq told Business Recorder that the IMF had reassessed the inflation in Pakistan from 9 per cent to 11 per cent that forced the central bank to maintain the interest rate at the present level. However, it would not be possible to gear up the economic growth in the wake of double digit mark-up, he said.
He added that the government would ultimately have to take risk for the sake of revival of economy because the manufacturing sector besides others sectors would receive adverse impact if mark-up rate is not reduced to pave the way for reviving economic activities in the country, he maintained. The Pakistan Industrial and Traders Association Front (PIAF) Chairman Irfan Qasier Shaikh pointed out that Pakistan had the highest interest rate in the regional countries.
India has just 7 per cent interest rate, Bangladesh 7.75 per cent while most of the other countries in the region have 5 to 7 per cent interest rates. On the contrary, Pakistan has double digit interest rate of 12.5 per cent which is one of the major factors creating hurdles to revive economic activities in the country. Most of the industries, which were no more economically viable had to close their operations while setting up of new industries have almost stopped in the country, he added.
He said that a number of sectors, including housing and automobile are the worst affected areas, as few are coming forward to apply for house building loans or car leasing for high interest rates. They say that only housing sector has the potential to support dozens of allied industries, which could create millions of jobs and help economic growth.
They apprehend that Finance Minister Shaukat Tarin might not fulfil his promise to bring down the mark-up rate to a single digit till June this year if inflation continues to rise or maintain at present level. He said that the government should take the business community on board while evolving economic policies so that the country's economy could be put on forward track in the shortest possible time failing which the problems would be aggravated, he maintained.