LCCI President signals increasing cost of doing business to halt growth rate
LAHORE (MNP) The Lahore Chamber of Commerce & Industry on Monday expressed concern over the rising fuel prices and observed that this will add to the already increased cost of doing business.
President LCCI Kashif Anwar along with Senior Vice President Zafar Mehmood Ch, Vice President Adnan Khalid Butt and Executive Committee, urged the government to take immediate measures to control the rising inflation and CODB.
They shared the statistics issued by World Bank which indicate that only 2% economic growth is anticipated in Pakistan for the current fiscal year, which ends in June 2023. They added that the slower development will be due to damages and disruptions brought on by catastrophic floods, a tight monetary policy, rising inflation, and an unfavourable global environment.
The LCCI office Bearers said that real GDP growth is anticipated to reach 3.2 percent in fiscal year 2024, signaling a modest recovery and if not tackled professionally this low growth will lead to a sea of inflation and unemployment.
LCCI President Kashif Anwar said that already the exchange rate is 17 percent, rupee is devaluating every day and now this raise in the energy prices will only add to the miseries of the already stretched economy.
They added that due to the current flooding, poverty will probably go worse in the hardest-hit areas and without resolute relief and recovery initiatives to aid the poor, preliminary projections indicate that the national poverty rate may rise by 2.5 to 4 percentage points, putting between 5.8 and 9 million people in poverty.
They said as Pakistan struggles with issues like a sizable current account deficit, huge public debt, and decreased demand from its traditional export markets during muted global growth, macroeconomic risks also remain high.
They also called to bring down markup and KIBOR rate in the larger interest of the industry. They said that lower markup rates make it cheaper to borrow for the industrialists. State Bank of Pakistan should bring down the markup rates to a single digit that will encourage the industries to take out loans to expand their operations.
They said that high cost of borrowing is discouraging the demand of credit by the private sector and slowing down the economic activities.
They said that reduction in markup rate from existing 17% to single digit will be a great favor to the industrial sector. It will help the government to attain the target of industrial growth, will reduce the cost of production and will also bring capital of the banks into circulation.
