Experts demand for 4 per cent policy rate cut to facilitate businesses

Business and tax experts voiced their views and concerns and called for yet another policy rate cut from SBP as businesses across Pakistan continue to face major hits due to the coronavirus-hit economy.

Reacting to the Pakistan Economic Survey released earlier today, business and tax experts voiced their views and concerns.

Industrialist Siraj Qasim Teli has called for yet another 4 per cent policy rate cut from the State Bank of Pakistan (SBP) as businesses across Pakistan continue to face major hits due to the coronavirus-hit economy.

Teli, the chairperson of the Businessmen Group (BMG) who has formerly been associated with the Karachi Chamber of Commerce and Industry (KCCI), said it was “all about survival during these times of crisis”.

He said whatever the Economic Survey presented was quite immaterial to the business fraternity as the coronavirus pandemic has changed the world completely. The facts and figures presented by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh seem irrelevant, he added.

Teli noted: “We have suggested to the ministry to reduce taxes such as the sales tax, income tax, and the withholding taxes so that the people can save more money.

“Businesses of all sizes are affected due to the pandemic and so the government should reduce utility bills for entrepreneurs and business community to float their businesses during these hard times, These incentives should be given for at least one year,” he stressed.

The industrialist reiterated the business community’s demand to cut the policy rate, which currently stands at 8 per cent. “To date, we are stressing that the interest rates should be brought down to at least 4 per cent.

Earlier today, Shaikh, the prime minister’s finance adviser, had presented the Pakistan Economic Survey 2019-20, which indicated that the country’s economy had shrunk 0.38% as the coronavirus pandemic wreaked havoc.

The adviser highlighted the state of the Pakistani economy in the outgoing fiscal year, noting that the virus outbreak had dealt a serious blow towards the last quarter of the year.

Shaikh revealed that the GDP was expected to contract 0.38% in FY2020 despite a 2.67% growth in the agricultural sector. However, the industrial and services sectors experienced a 2.64% and 0.59% squeeze, respectively, this year.