The Association of Builders and Developers (ABAD) urged on Monday the State Bank of Pakistan (SBP) to reduce the interest rate to single digit to boost investment and revive the country’s economy.
The Monetary Policy Committee (MPC)’s first meeting of the fiscal year 2025-26 is scheduled for Wednesday, July 30, 2025. The central bank, in its previously held MPC meeting on June 16, decided to keep the policy rate unchanged at 11%.
“The current 11% interest rate is strangling business activities across the country, discouraging private investment, and pushing economic growth into stagnation, ABAD chairman Muhammad Hassan Bakshi was quoted as saying in the ABAD statement.
He warned that without structural reforms in the monetary policy, “Pakistan could face severe challenges such as prolonged recession, rising unemployment, and declining industrial production”.
“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,” Bakshi said.
“The construction industry—which directly and indirectly provides employment to millions and stimulates over a hundred allied industries—cannot survive under the current interest rate regime.”
ABAD chairman argued that lowering the interest rate would unlock private capital, make housing finance more affordable, and spur activity across various sectors of the economy.
Meanwhile, the association also urged the government to take an immediate action to restore investor confidence, stabilise economic policy, facilitate the growth of the real estate sector, and introduce builder-friendly regulations.
“If Pakistan wants to compete regionally and attract investment, it must align its financial and economic policies with ground realities,” ABAD chairman said.
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