OICCI survey reveals business confidence boost in Pakistan

The Overseas Investors Chamber of Commerce and Industry (OICCI) has announced the results of its Business Confidence Index (BCI) Survey Wave 26, conducted across Pakistan in October and November 2024, ARY News reported.

The survey reveals a 9 percent (pc) improvement in business confidence, though the overall index remains negative at -5pc. This is a significant improvement compared to the -14pc recorded in the previous survey conducted in March and April 2024.

Key factors contributing to this improvement include positive economic growth, a stable exchange rate, and a notable decline in inflation. The services sector experienced the most significant recovery, with confidence rising from -14 pc in the last survey to +2pc in the current one. The manufacturing sector showed an improvement from -15pc to -3pc. However, the retail/wholesale sector saw a decline, with confidence dropping from -15pc to -18pc.

OICCI President Yusuf Hussain commented that the improved index reflects resilience in Pakistan’s business environment despite existing challenges.

He highlighted the government’s bold measures to comply with IMF Extended Fund Facility (EFF) regulations, which have led to better international risk ratings, improved foreign exchange reserves, a stable exchange rate, and reduced inflation, fostering a more positive business environment.

However, he also emphasized the need for better management of challenges such as rising costs, particularly in the energy sector, higher taxes, and inconsistent policies. Strengthened engagement between policymakers and the industry could attract local and foreign investment, enhancing business confidence and creating employment opportunities.

The survey also revealed a rise in optimism for the next six months, with 43pc of respondents expressing positive expectations compared to 34pc in the last survey. Key drivers of this optimism include global market growth, improved government policies, reduced inflation, better law and order, and economic progress.

OICCI Secretary General Muhammad Abdul Aleem noted that despite the improvements, the index reflects cautious optimism among businesses. He highlighted that the score for new investment plans remains concerning, with a drop from -12pc in the previous survey to -23pc in the current one. While 66pc of respondents viewed business conditions negatively over the past six months, this marks an improvement from 76pc in the previous survey.

Persistent challenges such as high inflation, political instability, rising fuel costs, and ineffective trade policies remain critical concerns. The survey also indicates an increase in foreign investors’ confidence, with their perception rising from -4pc in the last survey to +6pc in the current one.

The BCI survey results represent the views of key stakeholders accounting for approximately 80pc of Pakistan’s GDP. It covers regional, national, sectoral, and company-level business environments, with 41pc of respondents from the manufacturing sector, 35pc from services, and 24pc from the retail/wholesale sector.

Earlier, Pakistan’s economy showed remarkable improvement, with inflation reaching its lowest level in 3.5 years, according to the Consumer Confidence Index Survey for the fourth quarter of 2024.

According to reports, the survey highlights significant economic progress over the past year, marked by consistent growth in the Pakistan Stock Market (PSX).

The report also noted the establishment of several economic records during the fourth quarter and projected further improvements in the coming months.

It revealed a fourfold increase in the number of citizens who view the country’s economic condition as strong since September 2023. Additionally, 19 percent (pc) of respondents expect further economic improvements within the next six months.

For the first time, Pakistan surpassed Turkey in the global consumer confidence index. Confidence in job security continues to rise, with household purchasing power increasing by six points. Trust in local economic conditions grew by 20pc, accompanied by a notable decline in public skepticism.

The Ipsos Global Consumer Confidence Index, a critical survey that gauges consumers’ economic conditions and investment potential, emphasized Pakistan’s growing economic stability and resilience.