APTMA urges further rate cuts as real interest rate hits regional peak
By MG News | August 05, 2024 at 05:13 PM GMT+05:00
August 05, 2024 (MLN): All Pakistan Textile Mills Association (APTMA) has called for an immediate need to cut interest rates further to ease the cost of borrowing and encourage growth in the country.
The recent inflation figures for July, which came in at 11.8% year-over-year (YoY) despite a monthly price increase, have significantly improved the real interest rates in the economy.
With the policy rate currently at 19.5%, the real interest rate stands at 8.41%, the highest in the region.
In comparison, the next in line for positive real interest rates are China and India, with rates of 3.21% and 1.4%, respectively.
Meanwhile, countries like Bangladesh, and Turkey currently face negative interest rates.
| Pakistan | China | India | Vietnam | Bangladesh | Turkey | |
|---|---|---|---|---|---|---|
| Inflation | 11.10% | 0.20% | 5.10% | 4.40% | 9.70% | 61.80% |
| Policy Rate | 19.50% | 3.40% | 6.50% | 4.50% | 8.50% | 50% |
| Real Interest Rate | 8.40% | 3.20% | 1.40% | 0.10% | -1.20% | -11.80% |
Hence, APTMA has demanded that the government embrace further rate cuts as Pakistan currently stands in a positive position.
Especially after the government has introduced royalties and taxes on various sectors, only further cuts can help boost the economic sectors in the country.
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