FPCCI Demands 5% Policy Rate Reduction to Support Economic Growth
President Atif Ikram Sheikh-led Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has expressed dissatisfaction with the nation’s current monetary policy. Pakistan’s business, trade, and industry communities are concerned that the policy rate is still high despite the current decline in inflation.
In a statement issued on Wednesday, Sheikh noted that inflation has hit a 9-year low, based on government data. Inflation was only 1.5% in February 2025 and 2.4% in January 2025. The policy rate, however, is 12%, which leaves a huge gap of 1050 basis points when it is compared to core inflation.
Following discussions with different industries and sectors, FPCCI has urged an instant 500 basis points reduction in the policy rate in the next Monetary Policy Committee (MPC) meeting on March 10, 2025. The policy rate would then be closer to the Special Investment Facilitation Council’s (SIFC) objectives and the vision of the Prime Minister for increasing economic growth and exports.
Sheikh further added that experts in the industry anticipate core inflation to continue at the range of 1% to 3% during the fourth quarter of FY25, with inflationary pressures showing signs of easing and prices declining.
