President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) AtifIkram Sheikh, has criticized recent policy rate cuts as insufficient. Sheikh argued that the reductions of 150 basis points on June 10 and 100 basis points on July 29 fall short of the business community’s expectations. Sheikh pointed out that core inflation has remained stable between 11.8 percent and 12.6 percent for several months, suggesting ample opportunity for a more substantial policy rate cut.
He emphasized that the current rates are misaligned with the core inflation figures, affecting business costs and competitiveness. FPCCI President stressed that Pakistan’s cost of doing business, ease of operations, and access to finance are less favorable compared to regional competitors. He called for an immediate reduction of the policy rate to 15 percent to help Pakistani exporters remain competitive.
This adjustment, he added, should be coupled with the government’s commitments to rationalize electricity tariffs for industry and renegotiate power purchase agreements with independent power producers. Sheikh also questioned the government’s commitment to transparency and consultation in economic policymaking. He demanded clear answers on two critical issues: (i) the measures being undertaken to secure a new IMF program and their impact on business costs, and (ii) the steps the government will take post-IMF program to stabilize the economy and involve the business community in these decisions.
To improve price stability, Sheikh proposed that the State Bank of Pakistan (SBP) should focus on core inflation and exclude volatile prices. He recommended targeting non-food non-energy inflation for operational guidance and urged collaboration with federal and provincial authorities to tackle price manipulation and hoarding. Sheikh also emphasized the need for an active Competitive Commission of Pakistan (CCP) and effective price control mechanisms to support these efforts.
