|
Increase termed ‘Alarming’
KARACHI: President, Karachi Chamber of Commerce & Industry, Abdul Majid Haji Muhammad, in a press statement, termed the increase in discount rate by 50bps to 13 per cent absolutely "alarming" which will enhance the economic adversity.
Abdul Majid stated that increasing the discount rate on the juncture of new financial year is a disappointing sign which will further increase the fiscal deficit adding that the existing fiscal deficit of 6 per cent that is about Rs925 billion will further rise owing to excessive government borrowing and persistent inflation which are main causes for economic imbalances.
Abdul Majid was of the firm opinion that the Government, to control inflation and augment the economy, must drastically cut-down their luxurious expenditures and should take austerity measures accordingly for the interest of the nation.
Abdul Majid said that the hike in interest rate will act as an upshot to inflation and prices of consumer goods will multiply owing to increased cost of manufacturing and doing business. He said that the increase is perilous for the economy and he was of the view that the Government, to control and curtail inflation rate adopted policy and exercise to increase discount rate which has failed to depress the inflationary pressure on economy and as an outcome several sectors are facing setback in respect of their progress and now many more are fearing to closedown. Abdul Majid demanded the government to slash down its expenditures and decrease the discount and inflation rate to single digit in order to save the dwindling economy, as the cost of manufacturing and doing business has already touched the alarming level whereby survival is extremely difficult. He urged the government for increasing the tax to GDP ratio by taxing the untapped sectors to bridge the gap of fiscal deficit. -PR
|