LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) on Friday said the State Bank of Pak­istan’s (SBP) latest move is totally against the business community’s expectations as the stage has been set for cost-push inflation.

“Increasing the discount rate by 150 basis points would correspondingly jack up the cost of doing business that would ultimately hit the economic growth that has just started showing signs of recovery,” a joint statement issued by LCCI president Mian Nauman Kabir, senior vice president Mian Rehman Aziz Chan and vice president Haris Ateeq said.

The LCCI office-bearers said the SBP’s decision would not help curtail fiscal deficit nor control inflation as it had not served the purpose in the past and instead would create trouble for new investors. They said that at this point in time when both the trade and industry were in dire need of some special package, the increase in interest rate will prove only counterproductive to economic recovery.

“The cost of doing business in Pakistan is already the highest in the region. The business community has been demanding lowering of interest rate for the sake of new investments that are going down with every passing day,” the LCCI representatives said.

“Pakistani businessmen need cheaper money as on the one hand it would facilitate him while on the other it would help ensure economic growth, which is at the moment much below the target. The SBP should focus on reducing the banking spread to control inflation instead of jacking up the discount rate by 150 basis points,” the LCCI statement added.

Published in Dawn, November 20th, 2021