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| May 18, 2005 | Wednesday | Rabi-us-Sani 9, 1426 |
Cost of bank credit ‘lower’ in Pakistan
LAHORE, May 17: Prime Minister Shaukat Aziz said on Tuesday the cost of bank credit in Pakistan was still lower if the current rate of inflation was taken into consideration. Mr Aziz, who was speaking to businessmen at a function organized by the Lahore Chamber of Commerce and Industry, said the economy could not afford to have negative interest rates. He said it was not unusual for a growing economy like Pakistan’s to have a higher inflation, especially when the oil prices had touched new peaks.
However, he said, the pace at which the economy was growing offered many opportunities to the businessmen and investors. “If your business is not growing at 20 per cent (in spite of high interest rates), you should consider winding it up or changing the management,” he said.
He said the economy was expected to grow at 8.3 per cent this year as its per capita GDP would grow by more than $700. “This is the fifth time in the history of the country the economy has grown at a rate beyond eight per cent.” He said Pakistan would be among the top five growth economies of Asia this year.
Mr Aziz said the challenge for the government was the increased pressures on the prices. He said there was lot of liquidity in the economy, which had led to a mismatch between demand and supply. He said it had put pressure on the prices and pushed inflation up.
At the same time, he said, the rapid economic growth had created a new middle class in the country. “Things are changing. Even the rural population is reaping the benefits of economic growth. The improved agriculture output this year will pump in some Rs60 billion into the rural economy.”
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