ABAD calls for single-digit interest rate ahead of SBP’s monetary policy meeting

28/07/2025 admin

The Association of Builders and Developers (ABAD) on Monday urged the State Bank of Pakistan (SBP) to slash the interest rate to a single digit, warning that the current 11% rate is choking business activity, discouraging private investment, and driving the economy toward stagnation.

The appeal comes just days ahead of the Monetary Policy Committee’s (MPC) first meeting for fiscal year 2025–26, scheduled for Wednesday, July 30. In its previous session held on June 16, the SBP had decided to keep the policy rate unchanged at 11%.

In a statement, ABAD Chairman Muhammad Hassan Bakshi said, “The current 11% interest rate is strangling business activities across the country, discouraging private investment, and pushing economic growth into stagnation.”

He cautioned that without a structural shift in the country’s monetary framework, Pakistan could face prolonged recession, surge unemployment, and shrinking industrial output. “While economies around the world are reducing interest rates to promote growth, Pakistan’s unrealistic monetary policy is paralyzing its economy and destroying local industry,” he said.

Bakshi emphasized that the construction industry, which supports millions of direct and indirect jobs and stimulates over a hundred allied sectors, cannot survive under the current interest rate regime. He argued that a lower rate would unlock private capital, make housing finance more accessible, and spur broader economic recovery.

ABAD also called on the federal government to take immediate steps to restore investor confidence and stabilize economic policy. The association urged for pro-growth, builder-friendly regulations to revive the struggling real estate and construction sectors.

“If Pakistan wants to compete regionally and attract investment, it must align its financial and economic policies with ground realities,” the chairman added.

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