ISLAMABAD: The United Business Group of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) urged the government to lower the interest rate, check dollar costs and cut petroleum prices to beef up the fragile economy in the wake of swirling global inflation.
Presiding over a high-level meeting of the group, Chairman FPCCI Shahzad Ali Malik said that an urgent plan was needed on war footing to increase the industrial production in the coming years to give a boost to export, according to a press release issued here on Saturday.
He said once the export level increases, the International Monetary Fund (IMF) and other monetary bodies will become flexible for rupee valuation besides curtailing the widening trade deficit which in turn will make it easier to utilize the remittances for repayment of loans.
He said an increase in the interest rate also raises the cost of capital resulting in the reduction of investment within the economy as well as slowing down the growth rate of the economy overall which also curbs inflation.
Shahzad Ali Malik said the persistently higher rate will ultimately affect how markets are priced, could slow markets, and lead to higher levels of unemployment than the economy has grown used to be.
Regarding increasing prices of petroleum products, he said it leads to higher inflation, increases budget deficit, and puts downward pressure on the exchange rate which makes the impact more expensive to rising oil prices are the major concern for all developing countries and Pakistan is suffering from it too.
He said that all these factors would increase the cost of production and would not be able to compete in global markets, especially with neighbors.
Shahzad Ali Malik urged the government to address these issues on top priority to fully ensure ease of doing business taking all stakeholders into confidence, in view of the prevailing scenario.
He said UBG understands the impact of global inflation grappling the world and Pakistan is also
confronted with multiple challenges but the government on the other hand must come forward immediately without loss of time with a clear road map to put the bleak economy on track and provide solace to hard-hit traders and businesses community.