Syed Raza Hussain, President of the Federal B Area Association of Trade and Industries (FBATI), emphasized the need for reducing interest rates to help industries cope with rising operational costs and maintain their production levels. He pointed out that the increasing cost of doing business, along with high interest rates, is forcing industries to downsize and cut back on output, significantly impacting the country’s exports.
In a media address, Hussain highlighted that industries have faced steep declines in manufacturing capacity due to up to a threefold increase in utility prices, particularly electricity and gas, over the past year. Many businesses are also burdened by high costs for water supplies, further driving up production expenses. Small and medium enterprises (SMEs) have been hit the hardest, with some on the verge of closure due to soaring electricity costs.
Hussain called on the government to renegotiate tariffs with Independent Power Producers (IPPs) to bring down electricity prices for businesses. He also proposed a financing scheme for industries and SMEs to set up solar power plants at affordable rates as an alternative energy source. Additionally, he urged the government to fulfill its promise of paying pending benefits or subsidies to Karachi-based SMEs.
The State Bank of Pakistan (SBP) reported that credit to the private sector had declined, with industries retiring Rs376 billion in loans since the start of the financial year, compared to Rs282 billion in the same period last year. Hussain argued that interest rates should be brought down to single digits to attract local investors and encourage business expansion. He suggested that SBP could offer a specialized financing scheme for large industries and SMEs to further support growth.
While acknowledging signs of economic stability and positive macroeconomic indicators, Hussain stressed that long-term stability in business and industry is essential for sustained economic recovery. He also called for improved infrastructure and a more conducive environment to attract investors and boost business activities in Karachi.
