Inflation Surge Sparks Alarm Among Businesses, PIAF Urges Urgent Action

By Muhammad Shahzad, Lahore
LAHORE: The Pakistan Industrial and Traders Associations Front (PIAF) has expressed serious concern over the recent surge in inflation, which has crossed double digits for the first time in nearly two years, warning that the rising cost of doing business could further strain the country’s fragile economic recovery.
PIAF Chairman and President of the Lahore Chamber of Commerce and Industry, Faheemur Rehman Saigol, along with Senior Vice Chairman Nasrullah Mughal and Vice Chairman Tahir Manzoor Chaudhry, said that the latest inflation figures have created uncertainty for businesses already struggling with high input costs and weak demand.
In a joint statement, the PIAF leadership noted that the nearly 11 percent year-on-year increase in the Consumer Price Index (CPI) during April reflects a troubling trend, particularly as it is being driven by factors beyond the control of local industries, including rising global energy prices and supply disruptions.
They pointed out that transport costs and essential food prices have risen significantly, adding to operational expenses for manufacturers and traders. “The sharp increase in fuel and logistics costs directly impacts the entire supply chain, making goods more expensive and reducing competitiveness,” the statement said.
PIAF leaders also highlighted that energy tariffs have increased noticeably, which is particularly concerning for industrial units that rely heavily on electricity and gas. They warned that such developments could lead to reduced production, layoffs, and a slowdown in industrial activity if not addressed promptly.
Faheemur Rehman Saigol emphasized that the State Bank of Pakistan’s decision to raise the policy rate to 11.5 percent could further dampen business sentiment. He argued that increasing interest rates in a supply-driven inflation scenario may not produce the desired results and could instead raise the cost of borrowing for businesses.
“Industries are already under pressure due to high energy costs and declining purchasing power. Raising the policy rate will only make financing more expensive, discouraging investment and expansion,” Saigol said.
He added that inflation in the current context is largely driven by external shocks, including global oil price fluctuations and regional geopolitical tensions, rather than excessive domestic demand. Therefore, he stressed the need for targeted policy measures instead of across-the-board monetary tightening.
Senior Vice Chairman Nasrullah Mughal noted that small and medium enterprises (SMEs) are particularly vulnerable in the current environment. “SMEs operate on thin margins and have limited access to capital. Higher interest rates and rising costs could push many of them out of business,” he warned.
Vice Chairman Tahir Manzoor Chaudhry urged the government to provide relief to the business community through reduced taxation, subsidized energy rates, and incentives for export-oriented industries. He said that supporting industrial growth is essential for stabilizing the economy and creating employment opportunities.
PIAF also called for improved coordination between fiscal and monetary authorities to ensure that policies are aligned with ground realities. The leadership stressed that a balanced approach is needed to control inflation without stifling economic activity.
PIAF representatives urged the government to engage with stakeholders and develop a comprehensive strategy to tackle inflation while safeguarding the interests of the business community. They reiterated that sustainable economic growth can only be achieved through policies that promote investment, productivity, and stability.