ISLAMABAD: Pakistan Association of Large steel producers (PALSP) called on the State Bank of Pakistan for emergency rate cut like industry on edge of survival from devastating rains causing havoc in economy See also industry.
“Our Associative Accounts for over 70% of long products in the country, and with regret we have to state that today the majority of our members in disaster due to economic hardship caused by record flooding combined with some other factors.
From an economic point of view, the situation is now much worse. in comparison with any period in in history in Pakistan. In this moment in time, more radical measures required than Covid relief measures if industries are to survive. These measures need to be announced immediately if we want protect millions of jobs and avoid social disorder in country.”
Pakistan has 1.5 million people was reported to have been diagnosed with Covid 19 while floods alone caused 33 million people become displaced and challenge it can be seen as 22 times worse than the Covid outbreak, how many of areas are still under water and 8 million people mired in poverty due to a natural disaster. cost cargo of floods on in economy you can see the intersection over 40 billion dollars. The effects are only beginning to be felt when large-scale contract manufacturing record 16.5% in July.
“It is expected that the situation will only get worse. Continued ten-year high interest rates zero logic as it is demand cut through board due to floods. Commodity prices softened, oil prices came back down And we in State of economic emergency, this is a time when SBPs must act boldly to avoid social unrest and instability.
key rate currently is 15%, i.e. highest since last two decades last visible in April 1999 Industry experts say the unbearable underlying interest rate of 15% unstable for industry, comparing it with other regional countriesbenchmark percentage rate in Malaysia – 2.5%, Bangladesh – 3.08% and India – 5.9%.
It should be noted that the People’s Bank of China has reduced its rate on a one-year credit to 2.75% from 2.85% and invested an additional 400 billion yuan ($60 billion) in credit markets after growth in factory output and retail sales weakened in July and home sales dropped by double numbers. “We ask the Honorable Federal Minister for Ministry of Finance and Revenue, Senator Muhammad Ishaq Dar and SBP act now.”
PALSP also notes that in other countries, such as the UK, core inflation is 9.9% and monetary policy rate is 2.25%, which means real negative percentage rate of -7.65%. It would be wise to note that the UK announced £150bn energy subsidy scheme while Germany deployed €200bn in economic incentive.
However, core inflation in Pakistan is 13.8%. for September and CPI softened the month on month, along with average regional percentage rate of 3.82%. pakistan discount rate must be brought down up to 8% effective immediately and beyond reduced in nearest quarters to maximum of 6.15% Cybor.
The steel industry, which is capital intensive business and due to the deteriorating economic situation already facing serious liquidity crisis, while many small in medium mills already malfunction. It will cause structural damage to the industry for decades ahead.
According to PALSP “What will Pakistan do when we try to repair our 400 damaged bridges and 3000 km? of roads, because if the SBP does not make emergency cuts, there are not many of steel plant will remain for an operation?”