Employment Opportunities in Pakistan

State Bank of Pakistan (SBP) is being expected to raise its benchmark interest rate in the next monetary policy in an announcement today. If so, this will make it difficult for job seekers to find employment.

This is because, in order to reach economic stability benchmark, the central bank will raise its interest rate by 1%. If so, businesses and manufacturing sectors will come under pressure and other employment firms in the job market.

SBP’s motive behind the possible-decision, if taken, will be due to control inflation. In order to achieve this goal, the policy rate will change. The policy rate is the interest rate at which commercial banks borrow money from the central bank.

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A hike in the interest rate means commercial banks will also increase their interest rates, making borrowing more expensive for individuals, businesses and the government. Since manufacturing businesses are more dependant on loans, this decision will impact them the most.

In such situations, hiring freeze is applied and employment opportunities fall. Often, employers have to let go of employees by down-sizing in order to recover some of the finances for the company.

On the other hand, this also means that the government, which is the biggest borrower from the bank, will also have to re-consider all development projects, and will have to put a few plans on hold, even hiring plans.

Not just that, using credits cards to make purchases, i.e buying a new car, will also be quite expensive on the pockets for consumers. Experts say that the fast economic growth has taken a toll of on country’s economy.

What is your take on this?

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