In a turnaround, business confidence improves markedly

Retail and wholesale trade leads the upswing in May-October survey

KARACHI: In what can be called a surprising survey result, a group of multinationals in Pakistan has said that business confidence in Pakistan has significantly improved over the last six months (May to October 2017).

According to the Business Confidence Index (BCI) survey - Wave 15, overall business confidence in Pakistan stands at a positive 21%, up eight percentage points from 13% in the Wave 14 results announced in May 2017.

BCI is a biannual assessment that has been sponsored by the Overseas Investors Chamber of Commerce and Industry (OICCI) - an association of over 195 multinationals operating in Pakistan - since June 2010.



The survey, which is based on responses from common companies as well as OICCI members, provides a comprehensive review of business aspects that is also indicative of the overall direction of the economy.

This 8% improvement reflects a major turnaround after negative trends recorded in the last two surveys - Wave 13 and Wave 14 - indicating that the business community is once again bullish and increasingly confident of the investment opportunities available in Pakistan, according to a press statement.

However, the current score of 21% is significantly lower than the highest-ever BCI score of 36% recorded in the survey results issued in April 2016.

Latest survey results were largely influenced by the retail and wholesale trade sector, which led the upswing with 40% positive sentiment, a 27% improvement compared with the last survey.

The manufacturing sector followed with a confidence level of positive 16%, showing a substantial increase of 7% while the services sector at 15% net positive sentiment showed a marginal decline of 3%.

The current increase in BCI to 21% was mainly due to the significantly improved perception of the global as well as domestic business scenario over the past six months. This also includes positive business sentiments about the next six months.

These views of the respondents were largely based on improvement in security, law and order and the overall economy, increased consumer demand, better business alliances, easing of energy crisis, decrease in fuel prices and low inflationary pressures on various other products.

Sentiments of leading foreign investors also increased and touched 42%, up 5% from 37% recorded in the Wave 14 results.

OICCI President Khalid Mansoor congratulated the government and the business community for keeping faith in the economy and focusing on meeting the growing consumer demand and economic opportunities, brushing aside serious distractions and media hype during the past six months.

He pointed out that the current positive business sentiments should not be taken for granted as they were strongly co-related with good governance that needed to be supported by a progressive, transparent, consistent and predictable policy framework.



Mansoor urged the authorities, including provincial governments, to become more proactive and expedite critical interventions on all issues that were hindering investment and economic activities including FDI and exports.

“There is an urgent need to focus on addressing the country’s poor rating of 147 out of 190 countries in the recently issued World Bank’s 2018 Ease of Doing Business report, down from 144 in 2016 and way below the 75 rating in 2010,” he added.

Big cities across the country recorded higher business confidence. The change was mostly driven by Lahore while Karachi remained at the same level. However, there was a slight decline in Rawalpindi/Islamabad as well as non-metros.

Published in The Express Tribune, November 17^th, 2017.

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