KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has expressed disappointment over the State Bank of Pakistan’s recent decision to reduce the policy interest rate by 1 percent, bringing it down to 11 percent. The chamber’s president, Muhammad Jawed Bilwani, acknowledged the cut as a positive move but deemed it insufficient to stimulate significant economic growth.

In a statement on Monday, Bilwani highlighted the disconnect between the business community’s expectations and the central bank’s actions. The business sector has been advocating for a more substantial reduction in interest rates, aiming to bring them into single-digit territory.

Bilwani pointed to the nation’s record-low inflation, which stands at 0.3 percent in April 2025, as reported by the Pakistan Bureau of Statistics. This historic low, he argued, should have allowed for a more aggressive cut in the interest rate, which remains one of the highest in the region.

Drawing comparisons with neighboring countries, Bilwani noted that despite Pakistan’s low inflation, its interest rates surpass those of countries like India, Bangladesh, Vietnam, and Thailand, where rates range from 1.75 to 10 percent. He emphasized that these nations are proactively supporting their business sectors, while Pakistan’s high borrowing costs continue to burden local industries.

Bilwani further stressed the adverse impact of the high-interest rate environment on small and medium enterprises (SMEs), which he described as the backbone of Pakistan’s economy. The elevated cost of financing, he warned, is hampering the global competitiveness of SMEs and exporters, ultimately stifling growth.

Reiterating the KCCI’s call for a single-digit interest rate, Bilwani argued that such a measure is essential for unlocking the potential of Pakistan’s industrial and export sectors. He affirmed the chamber’s readiness to collaborate with policymakers to foster a more business-friendly economic environment.