Inflation Eases to 4.9%: A Golden Opportunity for Economic Growth
KARACHI: S.M. Tanveer, Patron-in-Chief of the United Business Group (UBG), has urged the government to slash the policy interest rate by 500 basis points. This call comes on the heels of a significant decline in the Consumer Price Index (CPI) for November 2024, which dropped to 4.9% year-on-year (YoY), down from 7.2% in October.
Interest Rate Cut: A Vital Step for Economic Revival
Tanveer emphasized that a sharp reduction in the policy rate would lower bank markup rates to single digits, making loans more affordable for businesses and individuals. “Reducing the interest rate will not only ease financial burdens but also serve as a catalyst for investment and economic growth,” he stated.
Lower borrowing costs can stimulate business expansion and consumer spending, two critical drivers of a robust economy. By making credit more accessible, the proposed rate cut could unlock new opportunities for small and medium enterprises (SMEs) and large-scale industries alike.
CPI Decline Reflects Positive Economic Trends
The sharp drop in CPI is a clear indication of improving economic conditions, according to Tanveer. He lauded the government’s economic planners for their effective policy measures, which have contributed to this positive development. “This CPI reduction surpasses all forecasts, showcasing the resilience of both the business community and the broader economy,” he noted.
Inflation Control Benefits Every Segment of Society
Tanveer highlighted the far-reaching impact of lower inflation on the general population. A decline in CPI directly translates into reduced living costs, giving consumers greater purchasing power. “This improvement brings much-needed relief to households, while also fostering a healthier economic environment,” he added.
UBG’s Commitment to Economic Stability and Prosperity
The United Business Group, along with its allied body BMPP, remains steadfast in its support for policies that enhance economic stability and growth. Tanveer reaffirmed UBG’s dedication to working closely with the government, industry leaders, and international partners. “Our goal is to sustain these gains and ensure continued prosperity for all stakeholders,” he concluded.
Conclusion: Seizing the Momentum for Sustainable Growth
The significant drop in inflation offers a unique opportunity for the government to adopt pro-growth monetary policies. A 500 basis points reduction in the policy rate could be the game-changer that propels Pakistan’s economy to new heights. By fostering investment and consumer confidence, this move can lay the foundation for long-term economic stability and prosperity.