Concerned over the increase in petroleum prices, the Lahore Chamber of Commerce and Industry (LCCI) has requested the government to reverse its decision. In a statement, LCCI President Kashif Anwar, Senior Vice President Zafar Mehmood Chaudhry, Vice President Adnan Khalid Butt and Executive Committee noted that this would raise the already high cost of doing business. They have asked the government to act right away to stop the growing cost.

They mentioned that according to World Bank figures, Pakistan's economy is only expected to increase by 2% this fiscal year. They stated that catastrophic flood damage and disruption, a strict monetary policy, rising inflation, and an unfavourable global climate will all contribute to slower progress.

According to the LCCI officeholders, the real gross domestic product growth is predicted to reach 3.2% in the upcoming fiscal year, suggesting a small rebound. If this low growth is not competently managed, it will further fuel inflation and unemployment. According to LCCI President Kashif Anwar, the rupee is depreciating at a pace of 17%, and the increase in fuel, oil, and lubricant costs would make trade and the economy even more difficult.

They said that without resolute relief and recovery efforts to aid the poor, preliminary projections indicate that the national poverty rate may increase by 2.5 to 4 percentage points, putting between 5.8 and 9 million people in poverty. They added that because of the current flooding, poverty is likely to worsen in the most severely affected areas. According to them, macroeconomic risks are still high as Pakistan battles with problems including its large public debt, current account deficit, and lower demand from its traditional export markets due to the slowing of the global economy.

For the sector's greater good, they also asked for lowering markup and the Karachi Interbank Offered Rate rates. They said that reduced markup rates make borrowing for industrialists more affordable. To encourage businesses to take out loans to grow their operations, the State Bank of Pakistan should reduce markup rates to a single digit.

They said that the high cost of borrowing is deterring the private sector from requesting loans and slowing down economic activity. They added that lowering the markup rate from its current level of 17% to just 10% would be very beneficial to the industrial sector since it would enable the government to achieve its goal of industrial expansion, lower production costs, and release bank money into the economy.

Credit: Independent News Pakistan-WealthPk