The North Karachi Association of Trade and Industry (NKATI) has urged the government and the State Bank of Pakistan (SBP) to avoid increasing interest rates in the upcoming monetary policy, warning that escalating tensions in the Gulf region could create additional pressure on Pakistan’s economy. NKATI President Faisal Moez Khan said a further increase in borrowing costs could negatively affect business activities, industrial production and exports at a time when manufacturers are already dealing with high operating expenses and energy costs. He stressed that policymakers should assess the potential economic consequences of regional instability before making monetary policy decisions. According to Khan, maintaining a supportive business environment and ensuring continuity in industrial operations are important for protecting employment, production capacity and Pakistan’s export performance.
Khan described the possible effects of prolonged Gulf tensions on Pakistan’s economy as a serious concern, particularly because the country remains exposed to changes in international energy prices, imported fuel costs and global trade conditions. He said any further escalation could influence the cost of oil, freight charges and the movement of goods through international supply chains. These developments could increase the expenses faced by manufacturers and exporters, placing additional pressure on production budgets and business planning. For industries that depend on imported energy and raw materials, fluctuations in global prices can affect operating costs and reduce the ability to compete in international markets. Khan called for a timely assessment of these risks so that the government could prepare appropriate measures to limit disruptions and support economic activity.
The NKATI president argued that higher interest rates under these circumstances could add another burden for businesses already facing financial and operational challenges. Increased borrowing costs can make financing more expensive for companies seeking working capital, purchasing equipment or expanding production facilities. Industrial enterprises may also face greater difficulty managing cash flow when energy prices, transportation expenses and other operating costs rise simultaneously. Khan warned that a combination of expensive financing and higher production costs could discourage investment and weaken industrial activity. He therefore urged the government and the central bank to consider the needs of the productive sectors when determining the direction of monetary policy. His position was that policymakers should avoid decisions that could further constrain business operations while external economic pressures remain uncertain.
Khan also highlighted the importance of consulting representatives of industry and trade before introducing measures that could affect production, employment and exports. He said industrial businesses were already dealing with high energy costs, rising operating expenses and strong competition in international markets. Under these conditions, closer engagement between policymakers and the business community could help identify the challenges faced by manufacturers and develop practical responses. He urged relevant government departments and industrial organisations to strengthen cooperation, address the difficulties confronting industrial enterprises and introduce business-friendly measures that reduce production costs. According to Khan, consistent economic policies are also necessary to maintain investor confidence, encourage business planning and create opportunities for exporters to strengthen their position in international markets.
Energy security and advance planning were identified as additional priorities in the face of the evolving regional situation. Khan said Pakistan should carefully assess its energy supply requirements, import needs and available alternative energy sources to prepare for possible disruptions. Since industrial output depends heavily on the availability and affordability of energy, unexpected increases in fuel prices or interruptions to supply could have consequences across several sectors of the economy. He suggested that more efficient energy use, the promotion of renewable energy and the provision of necessary facilities to industrial enterprises could help reduce exposure to external shocks. Such measures could support businesses in managing costs while improving their ability to continue operations during periods of international uncertainty. The comments underline the importance of combining immediate economic planning with longer-term measures to strengthen the resilience of the industrial sector.
The NKATI president further stressed that close coordination between the government and the business community would be essential to protect economic activity. He called for policy consistency, effective communication and decisions that reflect the operating conditions faced by manufacturers and traders. According to Khan, industrial organisations can help policymakers understand the practical consequences of rising input costs, financing expenses and disruptions to international commerce. Cooperation could also help identify areas where targeted support or administrative improvements would enable businesses to maintain production and preserve employment. He said a favourable business environment was necessary for strengthening the national economy and improving export capacity, particularly when external developments created uncertainty for local industries. Timely consultation and coordinated action would therefore be important in responding to the potential economic effects of regional tensions.
Khan also argued that developments in the Gulf region should not be viewed exclusively as a foreign policy concern because they could have direct consequences for Pakistan’s economic outlook. Changes in international oil prices, shipping expenses and supply chains may influence domestic production costs, import bills and export competitiveness. He called for timely economic assessments, effective diplomatic efforts, improved energy management and appropriate support for industry and trade to help the country withstand these pressures. While the extent of the potential impact will depend on how regional conditions develop, businesses and policymakers need to consider possible risks when making financial and operational decisions. His appeal for stable interest rates reflects concern that additional monetary tightening could intensify existing pressures on industrial enterprises.
The NKATI’s position places the upcoming monetary policy decision within the wider challenge of maintaining economic stability while supporting industrial growth. Khan has urged the government and the SBP to weigh the consequences of higher borrowing costs against the difficulties facing manufacturers and exporters, particularly as Gulf tensions threaten to increase energy and transportation expenses. He has also emphasised that interest rate decisions alone cannot address all the risks facing the economy. Consistent policies, better energy planning, stronger cooperation with industry and investment in alternative energy sources could help reduce vulnerabilities over time. For Pakistan’s industrial sector, the immediate priority is to maintain production, manage operating costs and protect export capacity while policymakers assess the possible consequences of developments in international markets.
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