Pakistan Muslim League-Nawaz (PMLN) leader and former finance minister Miftah Ismail has termed the increase in interest rates as another noose for the country’s industry.
In a statement, Miftah said the rising interest rates will only reduce industrial production and increase inconsequential government spending. One and a half percent interest rate hike will not have any impact on inflation, instead the private sector will face more difficulties and would slowdown, he said. Increasing it from 7 to 9 percent would further increase the government’s interest payments by Rs 400 billion annually, he added.
“The PTI government had tried to two years ago to control inflation and depreciation of the rupee with similar measures but because of that the economy fell further into recession, he pointed out. The Imran Niazi government has already reversed the country’s economy by raising interest rates. Once again, interest rates are rising sharply, the economy was already super slow, it will slow down further”, Miftah said.
Miftah questioned how could inflation, which is setting the country on fire, be brought under control by raising interest rates so fast? The current account deficit is set to reach an all-time high of $ 15 billion in October. Kt was virtually impossible to stop further devaluation of the rupee, especially when imports of $ 75 billion were inevitable, he said.
The former Federal Finance Minister said the government should reduce its royal expenses. Cheap gas should be given to import and other sectors. Run the industry so that there is maximum export and minimum import from the country. The government should reduce electricity tariffs to reduce inflation. Reducing petrol prices, giving relief to the people and economy, red tape must be reduced. Pakistan’s current inflation rate is not due to reduction in interest rates but due to the government making things more expensive especially electricity, gas and petrol.