KARACHI: Pakistan’s top business leaders warned on Thursday that the country’s fragile economic recovery is being undermined by record-high energy tariffs and an elevated policy rate that continues to choke industrial activity.
Speaking at a press conference at the Federation House, FPCCI President Atif Ikram said Pakistan stands “at a decisive economic turning point” and must now move decisively toward stability. He reiterated that crippling electricity prices and an unnecessarily high interest rate have become the biggest barriers to competitiveness.
“Electricity tariffs in Pakistan are among the highest in the region,” Ikram said, stressing that industries cannot grow under such cost pressures.
United Business Group (UBG) Patron-in-Chief S.M. Tanveer said Pakistan had won the “Marka-e-Haq” and emerged as an “Asian tiger,” but must now win the “battle for economic revival” and transition into an “economic tiger.”
He questioned the justification for maintaining the policy rate at 11 percent, arguing it could be reduced to 7 percent to ease the cost of financing for industries. Tanveer noted that the government carries liabilities of Rs54 trillion and pays Rs2 trillion annually in interest alone.
“Who will question the Monetary Policy Board about why an additional Rs2 trillion was spent in a single year?” he asked.
On the power sector, Tanveer said electricity prices had dropped from 15 cents to 11 cents after adjustments in IPP payments but have since risen again to 13 cents and may climb back to 15 cents. He said surging capacity charges are forcing many industries to shut down and pushing households toward solar alternatives.
The business community urged the government to rationalise energy tariffs, reduce the policy rate, and ensure long-term policy stability. Without urgent corrective measures, they warned, meaningful economic recovery will remain elusive.
