Islamabad, May 24, 2016 (PPI-OT): Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt on Tuesday said that State Bank of Pakistan reduced interest rates to decrease government’s debt servicing cost.
The domestic debt has ballooned up to thirteen trillion rupees which is a matter of serious concern, he said.
Shahid Rasheed Butt said that reduced policy rates will certainly benefit private sector while it will discourage banks as well as savings which will increase cash in the economy.
He said that central bank continue to slash policy rates since the oil prices tumbled in the international market but it has not increased private sector credit according to the expectations.
The private sector took Rs108 billion of extra credit in the first six months of the current fiscal as compare to the corresponding period but it was not to expand business but to survive, he added.
He said that private sector is forced to take costly credit from the market as their refunds worth billions of rupees have held up in the FBR which has resulted in serious cash flow problems.
Cotton collapse and sliding exports has damaged the GDP while government has accepted that growth targets have been missed, he said.
The business leader said that SBP has predicted that GDP will remain 4.2 percent against the target of 5.5 percent which sounds optimistic.
For more information, contact:
Islamabad Chamber of Small Traders and Small Industry
Office No, 9 Block E, Super Market, Islamabad