FPCCI Criticises SBP’s 100bps Cut as Inadequate

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has voiced strong disappointment over the State Bank of Pakistan’s latest monetary policy decision, calling the 100 basis points rate cut insufficient and out of sync with economic realities.

FPCCI President Atif Ikram Sheikh stated that the business and industrial community had been expecting a more aggressive move—specifically a 500 basis points reduction—to align with falling inflation and support growth. He noted that despite April 2024’s Consumer Price Index (CPI) registering at just 0.30 percent, the policy rate remains at 11 percent, creating a gap of over 1,000 basis points that, in his words, “makes no economic sense.”

Sheikh said the FPCCI had reached a consensus with stakeholders across sectors that a substantial rate cut was necessary to stimulate industrial activity, promote import substitution, and drive export growth, all central to the goals of the Special Investment Facilitation Council and the Prime Minister’s development agenda.

He added that with inflation expected to remain between 0 to 3 percent through May and June 2025, a policy rate closer to 7 percent would have been more appropriate.