Karachi: The Association of Builders and Developers of Pakistan (ABAD) has called on the federal government and the State Bank of Pakistan (SBP) to lower the policy interest rate to 9%, warning that the current 11% rate is stifling business activity and severely impacting the construction and housing sectors.
In a statement issued ahead of the upcoming monetary policy decision on July 30, ABAD Chairperson Mohammad Hassan Bakhshi urged policymakers to adopt a more growth-oriented approach to revive the economy. He argued that persistently high interest rates are deterring private investment, fuelling unemployment, and threatening to push the country into a prolonged period of economic stagnation.
“The construction industry directly and indirectly employs millions of people and supports over 100 allied sectors. At the current interest rate, it is becoming increasingly unsustainable,” Bakhshi said.
He emphasised that reducing the interest rate to single digits would not only stimulate private investment but also make housing finance more affordable, helping expand homeownership among low- and middle-income groups. A revival in construction, he added, would boost demand for key industries such as cement, steel, and electrical goods, thereby supporting economic growth and increasing government revenues.
Bakhshi warned that without urgent monetary policy reform, investor confidence would continue to decline, with both local and foreign investors shifting capital to regional markets like Dubai, where returns are more attractive and policy environments are more stable.
“Pakistan must align its financial policies with economic ground realities. A builder-friendly interest rate policy is essential to remain regionally competitive and revive stalled development projects,” he said.
ABAD also urged the government to introduce regulatory reforms and policy consistency to restore investor trust, ensure ease of doing business, and unlock the full potential of the real estate sector.
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