ISLAMABAD: Businessmen in a meeting at Islamabad Chamber of Commerce and Industry lauded the government decision to reduce the key policy rate by one percent. However, they demanded that government should make further cut in discount rate to bring it to 8 percent that would lower the cost of doing business and prop up the growth of business & economic activities.
Addressing the meeting, Muzzamil Hussain Sabri President, M. Shakeel Munir Senior Vice President and M. Ashfaq Hussain Chatha Vice President, Islamabad Chamber of Commerce and Industry said that the key policy rate in Pakistan was still higher in the region while China and India have brought down their policy rates to 5.6 percent and 7.75 percent respectively.
They said that the tight monetary policy in Pakistan dictated by the IMF for years have normally resulted in expensive financing for private sector and led the economy into a long period of slow growth. It was high time that banks should give more focus to productive sectors to steer the economy out of troubles.
They said as per World Bank data, domestic credit to private sector as percentage of GDP in 2013 was 140% in China, 124% in Malaysia, 51.8% in India, 41.8% in Bangladesh, 37.9% in Indonesia while it was just 16% in Pakistan. These facts show that private sector in Pakistan is facing great difficulties in availing bank credit for expanding business ventures and making investment.
They stressed that keeping in view the favorable external factors, government should maintain the tempo of easy monetary policy that would contribute positively to bring multiple benefits to the economy as it would stimulate the growth of private sector, reduce the ratios of defaults, encourage investment, improve trade competitiveness, boost business activities, create more jobs and promote exports.
