Business confidence rises 9%

BCI survey highlights cautious optimism despite persistent hurdles

KARACHI:

Overall business confidence in Pakistan has risen, despite persistent challenges such as high inflation, political instability, rising fuel prices, and ineffective trade policies. The Overseas Investors Chamber of Commerce and Industry (OICCI) revealed this trend in its Business Confidence Index (BCI) Survey – Wave 26, conducted across Pakistan in October and November 2024.

The survey reported a significant improvement in overall business confidence, which rose by 9%, shifting from negative 14% to negative 5% compared to the previous wave conducted in March and April 2024. The improvement in business sentiment is driven by positive economic growth, a stable exchange rate, and a notable decline in inflationary pressures.

The services sector led the recovery, improving from negative 14% to a positive 2%. This was followed by the manufacturing sector which also showed substantial progress, rising from negative 15% to negative 3%. However, the retail and wholesale sector experienced a decline, with confidence dropping from negative 15% to negative 18%.

The OICCI president said, "The improvement in the BCI reflects an overall improvement in Pakistan's economic outlook and highlights the resilience of the business environment despite ongoing challenges. Addressing the rising costs, particularly energy prices, high taxation, and policy inconsistency, through meaningful engagement between policymakers and the industry, is crucial. It will certainly enable the country to further improve business confidence, attract both local and foreign investment, and ultimately boost job creation across the country."

The survey results also indicated growing optimism for the next six months, with 43% of respondents expressing positive expectations, up from 34% in the previous wave. This optimism was attributed to several factors, including growth in the global market, improved government policies, declining inflation, enhanced law-and-order conditions, and ongoing economic recovery.

OICCI Secretary General M Abdul Aleem said, "The feedback from BCI Wave 26 reflects cautious optimism among businesses, with significant gains in the services and manufacturing sectors." However, Aleem said, "The new investment plans, overall, were negative 23% versus negative 12% in the previous BCI 25."