Lahore, July 19, 2012 (PPI-OT): The Lahore Chamber of Commerce and Industry Thursday urged the State Bank of Pakistan to immediately announce a cut of at least 2 percent in the markup rate which is too high as compared to the region in particular and developed world in general.
In a statement issued here, the LCCI President Irfan Qaiser Sheikh said that the major economies of the world including China, India, European Union and America have recently slashed interest rates to revive their respective economies but in Pakistan the SBP muntra of tight monetary policy continues to rule the roost against the wishes of the business doing people.
The LCCI President said that the province of Punjab is especially in dire need of drastic cut in markup as it lost 2 to 2.5 per cent of its total GDP that is equivalent to Rs 250 billion during the last year due to electricity and gas shortages.
Irfan Qaiser Sheikh said that cut in markup rates would not only strengthen economic activites but would also go a long way in controlling stagflation that is giving birth to many other economy related problems besides jacking up the graph of unemployment and resultant surge in crimes.
He said that cut in policy rate, therefore, is direly needed to jumpstart the economy which is at standstill and to revive the industry.
Irfan Qaiser Sheikh said that a cut of 50 to 100 basis points would not be doing any service to the dwindling economy. He said that it was very unfortunate that we have failed to learn any lesson from the tighter monetary policy stance adopted by the State bank of Pakistan in the yester years.
The LCCI President said that ongoing economic scenario shows that there is hardly any time left for economic managers of the country as the closures of industrial units and massive lay offs has become an order of the day in Pakistan.
Irfan Qaiser Sheikh said that high discount rate has been causing a great harm to economy and would continue to do so unless and until a realist approach is adopted.
The LCCI President said that despite higher inflation all the major economies have either curtailed or are in the process of reducing high interest rates to protect their economies.
He said that in the United Kingdom, the inflation is around 4.5 percent while the government, despite poor health of its economy, is not making any change in its interest rate that is 0.5 percent. He said that in USA, the rate is 0.25 percent and in Eurozone it is 1.5 percent.
The LCCI President said that the State Bank of Pakistan should understand that its continued tighter stance is inflicting a very heavy loss on the nation as the economy has already paid a very high price because of high interest rate.
The LCCI president said that if the present government was interested in seeing industrialization in the country it would have to give a sympathetic consideration to the genuine business community demands.
Irfan Qaiser Sheikh also urged the Prime Minister to direct all the concerned departments to take business community on board while evolving all future economic policies as they are the real stakeholders who can ensure letter and spirit implementation of government policies.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854