The Economic Policy and Business Development (EPBD) think tank has expressed deep concern over persistently high interest rates in Pakistan, warning that the State Bank\u2019s tight monetary stance is stifling private sector growth and forcing the government to pay an enormous cost of borrowing.<\/p>\n\n\n\n
In its latest assessment, EPBD noted that despite improving inflation trends, the State Bank of Pakistan (SBP) has reduced the policy rate by only one percentage point since January 2025, keeping it at 11 percent. The annual average real interest rate, the report said, has hovered around 8.5 percent \u2014 one of the highest in the region.<\/p>\n\n\n\n
The think tank said that as a result of high interest rates, the cost of doing business has surged, while the government has had to make additional interest payments worth Rs3 trillion to banks. \u201cThese policies are suffocating private investment, compelling the government to impose heavy taxes to meet fiscal needs,\u201d EPBD stated.<\/p>\n\n\n\n
It further warned that the monetary policy is contributing to an economic slowdown, mounting public debt, and a decline in growth prospects. \u201cInflation has recently risen to 6.2 percent, yet the policy rate remains stuck at 11 percent. Earlier, when inflation ranged between 0.3 percent and 5 percent, the policy rate was still maintained at 11 percent,\u201d the report added, pointing out a \u201ccomplete disconnect\u201d between inflation and interest rate trends.<\/p>\n\n\n\n
EPBD urged the central bank to align monetary policy with current economic realities, cautioning that continued rigidity in the interest rate framework could deepen Pakistan\u2019s growth challenges and increase the cost of economic recovery.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Economic Policy and Business Development (EPBD) think tank has expressed deep concern over persistently high interest rates in Pakistan, warning that the State Bank\u2019s tight monetary stance is stifling … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[8],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/posts\/3235"}],"collection":[{"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/comments?post=3235"}],"version-history":[{"count":1,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/posts\/3235\/revisions"}],"predecessor-version":[{"id":3236,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/posts\/3235\/revisions\/3236"}],"wp:attachment":[{"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/media?parent=3235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/categories?post=3235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pcn58.com.pk\/index.php\/wp-json\/wp\/v2\/tags?post=3235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}